Computer Sciences’ Profit Rises, but Misses Forecast
Computer Sciences Corp. said Monday its fiscal first-quarter profit rose 13%, slightly less than expectations, as sales grew 12%, meeting forecasts that were lowered after it warned last month of weaker revenue growth.
The El Segundo-based company said net income for the quarter ended June 30 rose to $96 million, or 56 cents a share, from $84.6 million, or 50 cents, a year earlier, missing analyst estimates by 1 cent.
Sales rose to $2.46 billion, with help from government contracts. The company signed $3.3 billion in new contracts during the quarter.
Computer Sciences had warned investors that sales growth for the quarter would be slower than expected because of declines in the euro and a couple of smaller acquisitions that took longer than expected to complete. Before the warning, analysts expected revenue growth of up to 15%.
Merrill Lynch & Co. analyst Stephen McClellan said he expects fiscal second-quarter sales to surge as much as 17%, as new contracts signed in the first quarter begin to generate revenue.
“There’s a bubble of business coming,” said McClellan, who rates Computer Sciences a “near-term buy.”
Part of that bubble could appear later this week, when Computer Sciences is expected to unveil a commercial contract that McClellan estimates could be worth as much as $2 billion.
“There will be an announcement soon,” Computer Sciences Chairman Van Honeycutt told analysts on a conference call. He declined to elaborate.
Shares of Computer Sciences fell 47 cents to close at $61.88 on the New York Stock Exchange.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
* Barnesandnoble.com Inc. said its second-quarter loss widened dramatically and warned that spending on new products and services may result in a wider-than-expected loss for the year. The Internet bookseller posted a loss of $40 million, or 27 cents a share, compared with a loss of $22 million, or 17 cents, a year earlier and well beyond the 18 cents analysts expected. Sales rose 77% to $67.4 million. Barnesandnoble.com did not give a forecast for its annual loss. Analysts expect its loss to narrow to an average 70 cents a share from 77 cents last year. Barnes & Noble Inc. and Bertelsmann each own a 40% stake in Barnesandnoble.com.
* Storage Technology Corp. said second-quarter operating earnings fell 68% to $8.7 million, or 9 cents a share, but beat expectations of 5 cents. The struggling data-storage equipment maker said revenue declined 22% to $512.5 million.
* Tyson Foods Inc., the largest U.S. poultry producer, said fiscal third-quarter profit dropped 41% to $40.5 million, or 18 cents a share, in line with estimates, as a chicken glut depressed prices. Sales fell 3.7% to $1.81 billion.
