Computer Sciences Preview: Street Expects 15% YOY EPS Growth

Shares of Computer Sciences Corporation CSC are slightly down on Tuesday as the company prepares to announce fourth quarter financial results after the market close.

According to Estimize, the Street expects the strongest quarter in two years (in terms of earnings), with earnings of $1.20 per share and revenue of $2.975 billion. The crowd is even more bullish, and anticipates earnings of $1.21 per share on revenue of $3.018 billion.

These figures compare to last quarter’s earnings of $1.18 per share on revenue of $2.947 billion, and to earnings of $1.04 per share on revenue of $3.329 billion reported in the fourth quarter of last year.

The company has managed to beat estimates the last eight quarters.

The second chart shows how sentiment has changed over time. Computer Sciences faced falling expectations as earnings loom.

Increasing Competition

In a recent article, analysts at Zacks reiterated a Hold rating on Computer Sciences, in anticipation of the quarterly results. They highlight the company’s position as “one of the leading players in the information technology services industry.” They believe that “the company’s adoption of a cloud-based model and re-engagement of the sales force will drive growth. Moreover, cost rationalization initiatives will have a positive impact on the fourth-quarter margins. The company’s traction in the cloud cyber security service market also bodes well,” the note explained.