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DXC Technology Q3 Earnings Beat Estimates, Shares Fall on Revenue Miss
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Key Takeaways
DXC posted Q3 earnings of 96 cents per share, topping estimates and rising 4.3% year over year.
Quarterly revenues declined 1% to $3.19 billion, hurt by weakness in the CES and GIS segments.
DXC now expects adjusted EPS of $3.15 instead of the earlier guidance range of $2.85-$3.35.
DXC Technology, Inc. (DXC - Free Report) reported better-than-expected bottom-line results for the third quarter of fiscal 2026. The company reported non-GAAP earnings of 96 cents per share, which beat the Zacks Consensus Estimate by 12.94%. Moreover, the bottom line increased 4.3% year over year.
DXC Technology has an impressive history of beating earnings estimates. Its earnings outpaced estimates in each of the trailing four quarters, the average surprise being 12.07%.
Despite delivering an earnings beat, shares plunged 6.3% during Thursday’s extended trading session as revenues fell short of the consensus mark. The company reported revenues of $3.19 billion, which missed the Zacks Consensus Estimate by 0.31% and decreased 1% year over year. On an organic basis, revenues declined 4.3% year over year.
DXC Technology Company. Price, Consensus and EPS Surprise
DXC Technology has changed its reporting segment structure, effective April 1, 2025, for fiscal 2026. The new structure includes three segments — Consulting & Engineering Services (“CES”), Global Infrastructure Services (“GIS”) and Insurance Services. This change is aimed at aligning financial disclosures with the company's operational organization and the way management runs the business.
Revenues from CES declined 0.1% on a year-over-year basis to $1.27 billion. On an organic basis, the division’s revenues decreased 3.6%. GIS revenues totaled $1.61 billion, down 2.7% year over year. On an organic basis, the division’s revenues dropped 6.2%. Revenues from Insurance Services rose 4.6% on a year-over-year basis to $321 million. On an organic basis, the division’s revenues grew 3.2%.
DXC’s non-GAAP operating income (Adjusted EBIT) was $263 million in the fiscal third quarter, down 8% year over year. The non-GAAP operating margin contracted 70 basis points to 8.2%.
DXC’s Balance Sheet & Cash Flow Details
DXC Technology exited the fiscal third quarter with $1.73 billion in cash and cash equivalents compared with $1.89 billion in the previous quarter. The long-term debt balance (net of current maturities) was $3.09 billion as of Dec. 31, 2025, up from $2.37 billion as of Sept. 30.
In the fiscal third quarter, DXC Technology generated operating cash flow of $414 million and free cash flow of $266 million. During the third quarter, it repurchased shares worth $65 million. In the first three quarters of fiscal 2026, it generated operating and free cash flows of $1.01 billion and $603 million, respectively. During the first nine months of fiscal 2026, it repurchased shares worth $188 million.
DXC Updates Guidance for FY26
DXC Technology updated the outlook for fiscal 2026. For the fiscal year, it now expects revenues of approximately $12.69 billion compared with the previous guidance of $12.67-$12.81 billion. The Zacks Consensus Estimate for the top line is pegged at $12.72 billion, indicating a decline of 1.2%.
DXC now projects the adjusted EBIT margin to be approximately 7.5% compared with the earlier guidance of 7-8%. Adjusted EPS is now projected to be about $3.15 instead of the previous guided range of $2.85-$3.35. The consensus mark for fiscal 2026 earnings per share is pegged at $3.16, calling for a decline of 7.9%.
For the fiscal fourth quarter, the company anticipates organic revenues to decline 4-5%. The adjusted EBIT margin is expected to be between 6.5% and 7.5%. DXC projects adjusted earnings per share of 65-75 cents for the fiscal fourth quarter.
The Zacks Consensus Estimate for fourth-quarter revenues and earnings is pegged at $3.2 billion and 78 cents per share, respectively.
DXC’s Zacks Rank & Other Stocks to Consider
Currently, DXC Technology carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Amphenol’s 2026 earnings has been revised upward by 10 cents over the past seven days to $4.26 per share, calling for an increase of 27.5% year over year. Amphenol shares have surged 107.3% over the past year.
The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has moved southward 3 cents in the past seven days to $33.05 per share, implying 298.7% year-over-year growth. Micron Technology shares have soared 381.7% over the past year.
The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings has been revised upward 22 cents over the past 30 days to $10.01 per share, indicating a year-over-year increase of 28.5%. Analog Devices’ shares have rallied 50.1% over the past year.
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DXC Technology Q3 Earnings Beat Estimates, Shares Fall on Revenue Miss
Key Takeaways
DXC Technology, Inc. (DXC - Free Report) reported better-than-expected bottom-line results for the third quarter of fiscal 2026. The company reported non-GAAP earnings of 96 cents per share, which beat the Zacks Consensus Estimate by 12.94%. Moreover, the bottom line increased 4.3% year over year.
DXC Technology has an impressive history of beating earnings estimates. Its earnings outpaced estimates in each of the trailing four quarters, the average surprise being 12.07%.
Despite delivering an earnings beat, shares plunged 6.3% during Thursday’s extended trading session as revenues fell short of the consensus mark. The company reported revenues of $3.19 billion, which missed the Zacks Consensus Estimate by 0.31% and decreased 1% year over year. On an organic basis, revenues declined 4.3% year over year.
DXC Technology Company. Price, Consensus and EPS Surprise
DXC Technology Company. price-consensus-eps-surprise-chart | DXC Technology Company. Quote
DXC’s Q3 Results in Detail
DXC Technology has changed its reporting segment structure, effective April 1, 2025, for fiscal 2026. The new structure includes three segments — Consulting & Engineering Services (“CES”), Global Infrastructure Services (“GIS”) and Insurance Services. This change is aimed at aligning financial disclosures with the company's operational organization and the way management runs the business.
Revenues from CES declined 0.1% on a year-over-year basis to $1.27 billion. On an organic basis, the division’s revenues decreased 3.6%. GIS revenues totaled $1.61 billion, down 2.7% year over year. On an organic basis, the division’s revenues dropped 6.2%. Revenues from Insurance Services rose 4.6% on a year-over-year basis to $321 million. On an organic basis, the division’s revenues grew 3.2%.
DXC’s non-GAAP operating income (Adjusted EBIT) was $263 million in the fiscal third quarter, down 8% year over year. The non-GAAP operating margin contracted 70 basis points to 8.2%.
DXC’s Balance Sheet & Cash Flow Details
DXC Technology exited the fiscal third quarter with $1.73 billion in cash and cash equivalents compared with $1.89 billion in the previous quarter. The long-term debt balance (net of current maturities) was $3.09 billion as of Dec. 31, 2025, up from $2.37 billion as of Sept. 30.
In the fiscal third quarter, DXC Technology generated operating cash flow of $414 million and free cash flow of $266 million. During the third quarter, it repurchased shares worth $65 million. In the first three quarters of fiscal 2026, it generated operating and free cash flows of $1.01 billion and $603 million, respectively. During the first nine months of fiscal 2026, it repurchased shares worth $188 million.
DXC Updates Guidance for FY26
DXC Technology updated the outlook for fiscal 2026. For the fiscal year, it now expects revenues of approximately $12.69 billion compared with the previous guidance of $12.67-$12.81 billion. The Zacks Consensus Estimate for the top line is pegged at $12.72 billion, indicating a decline of 1.2%.
DXC now projects the adjusted EBIT margin to be approximately 7.5% compared with the earlier guidance of 7-8%. Adjusted EPS is now projected to be about $3.15 instead of the previous guided range of $2.85-$3.35. The consensus mark for fiscal 2026 earnings per share is pegged at $3.16, calling for a decline of 7.9%.
For the fiscal fourth quarter, the company anticipates organic revenues to decline 4-5%. The adjusted EBIT margin is expected to be between 6.5% and 7.5%. DXC projects adjusted earnings per share of 65-75 cents for the fiscal fourth quarter.
The Zacks Consensus Estimate for fourth-quarter revenues and earnings is pegged at $3.2 billion and 78 cents per share, respectively.
DXC’s Zacks Rank & Other Stocks to Consider
Currently, DXC Technology carries a Zacks Rank #2 (Buy).
Amphenol (APH - Free Report) , Micron Technology (MU - Free Report) and Analog Devices (ADI - Free Report) are some other top-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Amphenol and Micron Technology sport a Zacks Rank #1 (Strong Buy) each at present, while Analog Devices carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Amphenol’s 2026 earnings has been revised upward by 10 cents over the past seven days to $4.26 per share, calling for an increase of 27.5% year over year. Amphenol shares have surged 107.3% over the past year.
The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has moved southward 3 cents in the past seven days to $33.05 per share, implying 298.7% year-over-year growth. Micron Technology shares have soared 381.7% over the past year.
The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings has been revised upward 22 cents over the past 30 days to $10.01 per share, indicating a year-over-year increase of 28.5%. Analog Devices’ shares have rallied 50.1% over the past year.