Computer Sciences Wins Task Order

Computer Sciences Corp. (CSC - Analyst Report) recently secured a task order from the U.S. Department of State Bureau of Consular Affairs, for roughly $25.0 million. The contract has a time period of 1 year, extendable up to another 4 years.

Through this task order, Computer Sciences will provide support services for consular operations in Tel Aviv and Jerusalem. The comprehensive support service will include the processing of visa-related information, setting up appointments, collecting fees and greeting services. This in turn, will allow the Department to offer better cross-country services to its citizens.

Computer Sciences’ rich industry experience and efficient services have made it popular amongst the various Governmental departments. Just a few days ago, the company clinched an information technology outsourcing deal with Royal Berkshire NHS (National Health Services) Foundation Trust.

The company also inked a five-year deal worth approximately $160.0 million a year with global defense and security company, BAE Systems. Moreover, the company secured $80.0 million worth of deals from the U.S. Missile Defense Agency.

Winning deals is not new for this Virginia-based tech giant. But headwinds in its government business are actually affecting the company’s ability to execute the deals that it wins at regular intervals. The major headwinds are coming from the uncertainty in tech spending and delay in resolving the U.K. NHS issue.

Company officials are excited about the NHS deal with Royal Berkshire, as they think that it would actually help Computer Sciences to evolve as a key player in the healthcare sector and partially offset the loss of the U.K. NHS contract. We also believe that the success with the Royal Berkshire NHS Foundation Trust will add some luster to the company’s fundamentals, which remain impacted by the U.K. issue.

However, Computer Sciences’ disappointing second quarter 2012 results and stiff competition from Accenture plc (ACN - Snapshot Report) and Hewlett-Packard Company (HPQ - Analyst Report) in the IT and cloud computing space concern us.

Computer Sciences has a Zacks #5 Rank, implying a short-term Strong Sell rating.

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