Computer Sciences Posts Upbeat Q4 Earnings, Plans To Split Into Two Companies

Shares of

gained around 5 percent in after-hours trading after the company reported better-than-expected earnings for the fiscal fourth quarter. CSC announced its plans to split into two publicly traded companies. The company also announced its plans to pay a special cash dividend of $10.50 per share at the closing of split-up. The Falls Church, Virginia-based company posted quarterly income from continuing operations of $13 million, or $0.06 per share, versus $276 million, or $1.83 per share, in the year-ago quarter. Excluding one-time items, the company earned $1.26 per share. Its revenue slipped to $2.91 billion from $3.33 billion. However, analysts were expecting earnings of $1.20 per share on revenue of $2.96 billion. The average estimate among 13 Estimize users was for earnings of $1.02 per share and revenue of $3.01 billion. Global Business Services revenue dropped to $980 million in the quarter, versus $1,152 million in the year-earlier period. Global Infrastructure Services revenue declined to $929 million from $1,173 million, while North American Public Sector revenue came in flat at $1.00 billion in the quarter. During the fourth quarter, the company returned $257 million to shareholders. Adjusted operating income slipped to $349 million, from $364 million in the year-earlier quarter. Adjusted operating margin widened to 12.0 percent from 10.9 percent. Adjusted EBIT dropped to $283 million from $296 million, while adjusted EBIT margin widened to 9.7 percent from 8.9 percent. "In fiscal 2015, CSC again delivered earnings growth, margin expansion, and healthy cash flow, and returned significant capital to our shareholders. We finished the year with sequential revenue growth on a constant currency basis and good bookings performance," said Mike Lawrie, president and CEO. "We continue to invest in new offerings to better position CSC to capitalize on the significant growth opportunities we are seeing in the marketplace." For FY16, CSC projects adjusted earnings of $4.75 to $5.05 per share, versus analysts' estimates of $4.58 per share. CSC shares gained 4.94 percent to $71.00 in the after-hours trading session.