A month has gone by since the last earnings report for Computer Sciences Corporation . Shares have added nearly 11% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Computer Sciences Tops on Q3 Earnings & Revenues
Computer Sciences reported third-quarter of fiscal 2017 non-GAAP earnings from continuing operations of $0.81 per share, which surpassed the Zacks Consensus Estimate of $0.71 per share.
Quarter Details
Revenues were up 9.5% from the year-ago quarter to $1.971 billion and beat the Zacks Consensus Estimate of $1.898 billion.
Segment-wise, revenues from Global Business Services (GBS) increased 18.1% on a year-over-year basis to $1.046 billion, driven by synergies from the recent acquisitions (UXC and Xchanging). Revenues from the new business for GBS came in at $1.1 billion during the quarter.
Global Infrastructure Services (GIS) revenues were up a marginal 0.8% from the year-ago quarter to $871 million, primarily attributable to growth in next generation offerings and synergies from recent acquisitions. Revenues from new business for GIS awards came in at $1.3 billion during the quarter.
The company reported bookings of $2.4 billion in the quarter.
The company’s adjusted operating income increased 13.7% year over year and came in at $216 million. Operating margin increased 41 basis points (bps) on a year-over-year basis to 11.3%.
Adjusted net income from continuing operations came in at $123 million or $0.81 a share during the quarter.
The company exited the quarter with $1.11 billion in cash and cash equivalents compared with $1.05 billion in the previous quarter. Long-term debt balance (including current portion) was $2.923 billion. Net cash provided by operating activities during the quarter came in at $563 million. Free cash during the quarter came in at $299 million.
During the quarter, Computer Sciences paid $20 million as dividends.
Fiscal 2016 Outlook
Computer Sciences reiterated its fiscal 2017 guidance. For fiscal 2017, the company continues to expect revenues to be up in low double digits on a constant currency basis.
The company continues to expect non-GAAP earnings in a range of $2.75 to $3 per share (excluding the amortization of all purchase accounting intangibles).
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to seven lower. In the past month, the consensus estimate has shifted 9.29% downward due to these changes.
VGM Scores
At this time, Computer Sciences' stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for growth investors while also being suitable for those looking for value.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Computer Sciences (CSC) Up 11% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Computer Sciences Corporation . Shares have added nearly 11% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Computer Sciences Tops on Q3 Earnings & Revenues
Computer Sciences reported third-quarter of fiscal 2017 non-GAAP earnings from continuing operations of $0.81 per share, which surpassed the Zacks Consensus Estimate of $0.71 per share.
Quarter Details
Revenues were up 9.5% from the year-ago quarter to $1.971 billion and beat the Zacks Consensus Estimate of $1.898 billion.
Segment-wise, revenues from Global Business Services (GBS) increased 18.1% on a year-over-year basis to $1.046 billion, driven by synergies from the recent acquisitions (UXC and Xchanging). Revenues from the new business for GBS came in at $1.1 billion during the quarter.
Global Infrastructure Services (GIS) revenues were up a marginal 0.8% from the year-ago quarter to $871 million, primarily attributable to growth in next generation offerings and synergies from recent acquisitions. Revenues from new business for GIS awards came in at $1.3 billion during the quarter.
The company reported bookings of $2.4 billion in the quarter.
The company’s adjusted operating income increased 13.7% year over year and came in at $216 million. Operating margin increased 41 basis points (bps) on a year-over-year basis to 11.3%.
Adjusted net income from continuing operations came in at $123 million or $0.81 a share during the quarter.
The company exited the quarter with $1.11 billion in cash and cash equivalents compared with $1.05 billion in the previous quarter. Long-term debt balance (including current portion) was $2.923 billion. Net cash provided by operating activities during the quarter came in at $563 million. Free cash during the quarter came in at $299 million.
During the quarter, Computer Sciences paid $20 million as dividends.
Fiscal 2016 Outlook
Computer Sciences reiterated its fiscal 2017 guidance. For fiscal 2017, the company continues to expect revenues to be up in low double digits on a constant currency basis.
The company continues to expect non-GAAP earnings in a range of $2.75 to $3 per share (excluding the amortization of all purchase accounting intangibles).
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to seven lower. In the past month, the consensus estimate has shifted 9.29% downward due to these changes.
Computer Sciences Corporation Price and Consensus
Computer Sciences Corporation Price and Consensus | Computer Sciences Corporation Quote
VGM Scores
At this time, Computer Sciences' stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for growth investors while also being suitable for those looking for value.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.