Earnings Highlights and Review: DXC’s Quarterly Revenue Grew 4.5%; Adjusted EPS Surged 40%

Research Desk Line-up: 21Vianet Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 16, 2017 / Pro-Trader Daily publishes post-earnings coverage on DXC Technology Co. (NYSE: DXC) following the Company’s disclosure of its results on behalf of Computer Sciences Corporation (“CSC”) for the fourth quarter of fiscal 2017 on May 25, 2017. The end-to-end IT services Company outperformed earnings expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at: http://protraderdaily.com/register/.

Get more of our free earnings reports coverage from other constituents of the Information Technology Services industry. Pro-TD has currently selected 21Vianet Group, Inc. (NASDAQ: VNET) for due-diligence and potential coverage as the Company announced on May 25, 2017, its unaudited financial results for Q1 2017 which ended on March 31, 2017. Register for a free membership today, and be among the early birds that get access to our report on 21Vianet when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on DXC; also brushing on VNET. With the links below you can directly download the report of your stock of interest free of charge at:

http://protraderdaily.com/optin/?symbol=DXC

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Change of Companies

Effective April 01, 2017, CSC became a wholly owned subsidiary of DXC Technology Company, an independent public Company formed in connection with the spin-off and combination with CSC of the Enterprise Services business of the Hewlett Packard Enterprise Company (“HPES”). CSC’s common stock was suspended from trading on the NYSE effective as of the opening of trading on April 03, 2017. DXC’s common stock began regular-way trading under the symbol “DXC” on the NYSE on April 03, 2017. According to the official press release the financial information in the earnings releases relates only to CSC and its subsidiaries.

Earnings Reviewed

For the three months ended March 31, 2017, CSC posted revenue of $1.89 billion, up 4.5% compared to revenue of $1.81 billion for the three months ended April 01, 2017. The Company’s revenue lagged behind analysts’ estimates of $1.95 billion. For FY17, CSC recorded revenue of $7.61 billion compared to revenue of $7.11 billion in FY16.

For Q4 FY17, CSC’s loss from continuing operations before taxes was $187 million compared with loss of $187 million in Q4 FY16 and included a charge of $153 million towards restructuring costs, charge of $147 million for transaction, and integration-related costs and a charge of $86 million of pension and OPEB actuarial and settlement impacts. The Company’s non-GAAP income from continuing operations, before taxes was $199 million for the reported quarter compared with $109 million in the prior year’s same quarter

CSC’s consolidated segment’s commercial operating income, which includes Global Business Services (GBS) and Global Infrastructure Services (GIS), excluding certain items, was $248 million compared with $156 million in Q4 FY16. The Company’s consolidated segment commercial operating margin on the same basis was 13.1% for the reported quarter compared with 8.6% in the year ago same period.

During Q4 FY17, CSC’s adjusted EBIT was $216 million, while adjusted EBIT margin totaled 11.4% versus 6.8% in the prior year’s comparable quarter. For FY17, CSC’s adjusted EBIT was $627 million and adjusted EBIT margin was 8.2% compared with 7.1% in the year ago same period.

For Q4 FY17, CSC posted net loss from continuing operations of $(1.05) per diluted share compared with net loss $(0.78) per diluted share, reflecting merger-related integration and transaction costs, as well as pension and restructuring costs. The Company’s non-GAAP earnings for the reported quarter totaled $1.15 per diluted share compared with $0.82 in the prior year’s corresponding period, which exceeded Wall Street’s expectation for earnings of $0.85 per share.

For FY17, CSC’s loss from continuing operations was $(0.88) per diluted share compared with income from continuing operation of $0.50 in FY16, attributed to merger-related integration and transaction costs, as well as pension and restructuring costs. The Company’s non-GAAP diluted earnings per share from continuing operations were $3.10 in the reported quarter compared with $2.57 in the year ago same period.

Segment Results

During Q4 FY17, CSC’s GBS segment reported revenues of $1.04 billion, reflecting an increase of 10.8% compared with revenue of $941 million in Q4 FY16. The segment’s revenue increased 14.2% on a y-o-y basis to $1.08 billion. GBS revenues growth was driven by the contributions from its recent acquisitions as well as momentum in the business process services offerings. GBS consolidated segment’s operating margin in the reported quarter was 13.8% up from 11.1% in the prior year. The Company noted that GBS recorded new business awards worth $1.1 billion in the reported quarter.

For Q4 FY17, CSC’s GIS segment generated revenues of $846 million, down 2.3% compared with $866 million in Q4 FY16. On a constant currency basis, GIS revenues increased 0.2% to $868 million. GIS consolidated segment operating margin in the reported quarter totaled 12.3% up compared to 6.0% in the prior year’s same quarter, reflecting a shift in mix toward cloud-based software solutions. The segment reported new business awards of $1.0 billion in the current quarter.

Cash Matters

For Q4 FY17, CSC’s net cash provided from operating activities was $173 million compared with $60 million in Q4 FY16. The Company’s net cash provided by operating activities was $978 million in FY17 compared with $802 million in the prior year.

CSC’s adjusted free cash flow was $204 million in the reported quarter compared with negative $(66) million in the year ago same quarter. Adjusted free cash flow was $610 million in FY17 versus $319 million in the year ago comparable period.

During Q4 FY17, CSC returned $20 million to shareholders in the form of common stock dividends.

Stock Performance

On Thursday, June 15, 2017, the stock closed the trading session at $74.10, marginally down 0.92% from its previous closing price of $74.79. A total volume of 1.70 million shares have exchanged hands. DXC Technology’s stock price soared 7.72% in the last three months, 21.54% in the past six months, and 43.41% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 24.71%. The stock has a dividend yield of 0.97%. At Thursday’s closing price, the stock’s net capitalization stands at $21.14 billion.

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