computer sciences FY 2001 Q3

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  • 1. Computer Sciences Corporation QUARTERLY HIGHLIGHTS THIRD QUARTER FISCAL 2 0 0 1 (E NDE D DECEMBER 2 9 , 2 0 0 0 ) ABOUT CSC We are pleased with our financial performance for the third quarter during a challenging and turbulent period for IT service providers. The strong revenue growth resulting from our federal government vertical Computer Sciences market, coupled with the continuing strength in commercial outsourcing, were the principal contributors Corporation, one of the to our increased quarterly revenue performance. world’s leading consulting Van B. Honeycutt and information technology Chairman, President and Chief Executive Officer (IT) services firms, helps Computer Sciences Corporation clients in industry and For the third quarter (ended December 29): revenues were $2.7 billion, a 12.9% increase over government achieve fiscal 2000 (or approximately 19% in constant currency); earnings, before special items, increased strategic and operational 9.6% to $122.9 million; earnings per share (diluted), before special items, were 72 cents, a 9.1% increase results through the use of versus fiscal 2000’s 66 cents; net income and earnings per share (diluted) were $65.6 million and 38 cents, technology. The company’s respectively; and announced major new business awards were $1.8 billion. success is based on its For the nine months (ended December 29): revenues were $7.6 billion, up 12.2% over the comparable culture of working collabo- nine-month period of fiscal 2000 (or approximately 17% in constant currency); earnings, before special ratively with clients to items, increased 13.1% to $327.9 million; earnings per share (diluted), before special items, were $1.92, a develop innovative tech- 12.3% increase over the $1.71 for last year’s comparable period; net income and earnings per share (diluted) nology strategies and solu- were $270.6 million and $1.58, respectively; announced major new business awards totaled $9.4 billion. tions that address specific The third quarter’s results were impacted adversely by the effects of currency, severance costs business challenges. associated with headcount reductions in CSC’s global IT consulting practices and lower than anticipated healthcare market software licensing sales late in the quarter. The company has responded to these Having guided clients market factors by swiftly implementing additional cost containment activities. through every major wave The results for the third quarter include special items of $84.2 million ($57.3 million after tax), or of change in information 34 cents per share which consisted of the restructuring of CSC’s global financial services activities resulting technology since 1959, from the acquisition of Mynd Corporation and final resolution of items from operations previously sold CSC combines the newest or phased out. technologies with its For the third quarter, global commercial revenues grew 11.1% (or approximately 19% in constant capabilities in consulting, currency), to $2 billion compared with $1.8 billion in last year’s third quarter. An increase in U.S. systems design and inte- commercial revenue of 10.5% to $999.6 million from last year’s $904.6 million, and an increase in non- gration, IT and business European international revenue of 22.1% (or approximately 36.2% in constant currency) to $314.2 million process outsourcing, appli- from last year’s $257.4 million, contributed to this performance. European revenue was $703.4 million, cations software, and Web and application hosting up 7.5% (or approximately 24.2% in constant currency) from last year’s $654.3 million. The excellent to meet the individual local currency revenue growth in Europe was predominantly driven by outsourcing activities. needs of global corporations Revenue derived from CSC’s U.S. federal government activities continued to show significant growth, and organizations. increasing to $647.5 million, up a strong 19.1% from the $543.8 million recorded in last year’s third quarter. Both civil agencies and Department of Defense (DoD) activities generated double-digit revenue With more than 68,000 growth over the comparable period last year. CSC’s civil agencies business rose 22.2% to $248.1 million, employees in locations up from $203.1 million last year. DoD revenue climbed to $399.4 million, up 17.2% from last year’s worldwide, CSC had $340.7 million. revenues of $10.2 billion The company has announced major new business awards of $9.9 billion so far in the current fiscal for the 12 months ended year. With a strong opportunity pipeline in both the commercial and federal markets, it is anticipated December 29, 2000. CSC will close out another year of solid results. 3RD QUARTER FISCAL 2001 FINANCIAL HIGHLIGHTS (unaudited) Revenues By Major Market Third Quarter Nine Months Ended $ in millions, except 12/29/00 12/29/00 12/31/99 12/31/99 Federal Commercial per-share amounts 24% 76% ($ in millions) Revenues $ 6,795.5 $ 2,360.1 $ 7,626.9 $ 2,664.7 U.S. Commercial — $999.6 15% Europe — $703.4 9% 38% 65.6 * 82.3 ** $ 270.6 * Net Income $ 260.0 ** $ $ Other International — $314.2 12% U.S. DoD — $399.4 Diluted Earnings U.S. Civil Agencies — $248.1 26% 0.38 * 0.48 ** $ 1.58 * Per Share $ 1.54 ** $ $ * Includes special items of $84.2 million ($57.3 million after income taxes), or 34 cents per share (diluted). Total – $2,664.7 ** Includes special items totaling $41.1 million ($29.8 million after income taxes), or 18 cents per share (diluted).
  • 2. provide computing resources and CSC’S SERVICES ENCOMPASS THREE BROAD INVESTMENT DATA support services to enable space and NY SE: CSC AREAS: Earth scientists funded by NASA to • Management and Information Recent Closing Price: 62.50 (2/13/01) accomplish their research goals. Technology Consulting – Dramatically 52-Week Range: 51.56 – 99.88 improve client organizations’ operations. Shares Outstanding: 168.6 million • MedUnite – MedUnite, a service Often streamline basic business Registered Shareholders: 9,794 company founded by leading health processes. Institutional Ownership: 73% plans to reduce administrative Average Daily Trading Volume: inefficiencies in the U.S. healthcare • Systems Development and Integration 3rd Quarter FY 2001 – 787,308 market, has selected CSC to play a – Design, develop and build information Market Cap: $10.5 billion leading role in the company’s effort to technology systems. Combine hardware, create an e-commerce solution that con- software and communications into RESEARCH COVERAGE nects healthcare payors and providers. more productive systems. A.G. Edwards (Greg Gieber) CSC will serve as MedUnite’s IT support Bear, Stearns ( Jim Kissane) contractor and systems integrator. • Outsourcing and Operations Support CS First Boston (Mark Wolfenberger) and Information – Directly operate • Global Crossing – As part of a global clients’ information systems. CSC ING Barings (Brian Maimone) strategic alliance with Global Crossing, often acquires clients’ systems and Goldman Sachs (Greg Gould) CSC has received preferred provider employees. J.P. Morgan Securities (Bob St. Jean) status which will enhance Global Lehman Brothers (Karl Keirstead) Crossing’s IT infrastructure through RECENT ENGAGEMENTS INCLUDE: joint development of SAP, Customer • U.S. Department of State – CSC Merrill Lynch (Steve McClellan) Relationship Management, and was awarded contracts to assist U.S. Morgan Stanley DW (David Togut) Web-based billing systems. Through embassies and consulates worldwide. SG Cowen & Co. (Moshe Katri) a joint marketing arrangement, the CSC will implement e-government companies plan to deliver integrated solutions to improve visa processing Salomon Smith Barney (Pat Burton) solutions to multinational organizations. and issuance services through customer Wit SoundView (Gary Helmig) contact centers with integrated voice Standard & Poor’s ( Jonathan Rudy) • National Institutes of Health (NIH) – response systems and web services. Value Line (George Niemond) CSC has been selected as one of more than 40 companies that will compete for • NASA – CSC will support NASA’s SHAREHOLDER SERVICES work under a multiple-award contract Center for Computational Sciences For more information regarding CSC: in support of the NIH National (NCCS) at Goddard Space Flight Information Technology Acquisitions Center. CSC will acquire, install and • Shareholder services and literature and Assessment Center. Under the manage the latest supercomputer request line – (800) 542-3070 contract, CSC will provide IT solutions systems on a multi-year technology covering a broad range of products, refresh basis, and provide services • Facsimile service – (800) 962-7328 services and solutions. in support of the NCCS mission to • Website – http://www.csc.com FY 2000 REVENUES CSC REVENUE GROWTH FY 1996-2000* BY BUSINESS SERVICES* • Registrar and transfer agent – $ 10 $ in billions Mellon Investor Services P. O. Box 3315 Systems Outsourcing Integration S. Hackensack, New Jersey 07606 8 (201) 329- 8660 or (800) 526 - 0801 39% • CSC Investor Relations – 24% Bill Lackey 6 37% Director, Investor Relations (310) 615 -1700 4 Management Consulting/ FY96 FY97 FY98 FY99 FY00 Lisa Runge Professional Services Manager, Investor Relations * CSC’s fiscal year ends the Friday closest to March 31. * Based on CSC estimates. (310) 615 -1680 All statements in this document that do not directly and exclusively relate to historical Email: InvestorRelations@csc.com facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent the Company’s intentions, plans, expectations and beliefs, and are subject to risks, uncertainties and other factors, • CSC Headquarters many of which are outside the Company’s control. These factors could cause actual 2100 East Grand Avenue results to differ materially from such forward-looking statements. For a description El Segundo, California 90245, USA of these factors, see the section titled “Forward-Looking Statements” in the Company’s (310) 615-0311 Quarterly Report on Form 10-Q for the fiscal quarter ended December 29, 2000. Printed in U.S.A. WH# CC -3Q01