CSC: Managed Services Margins Rise, Cloud Revenues Triple

CSC: Managed Services Margins Rise, Cloud Revenues Triple

Computer Sciences Corp. Company LogoA turnaround at Computer Sciences Corp. (NYSE: CSC) is showing signs of progress. Although the company's managed services revenues slipped 3 percent in the most recent quarter, CSC says margins are improving and the company signed $1.4 billion in new managed services business during the period. That's impressive, considering CSC's managed services business stumbled badly back in 2011 and has since required extra attention from company leadership.

Let's start with CSC's top-line: Total quarterly revenues were $3.78 billion, up from $3.69 billion in the corresponding quarter last year. CEO Mike Lawrie said the company's turnaround is "tracking to plan." As a result, the company raised its  target for fiscal year 2013 earnings per share from continuing operations. The company may also sell off low-margin businesses.

In the managed services sector, the company said quarterly revenue decreased 3% to $1.62 billion. Segment operating margin increased by 120 basis points to 7.7% due to better contract performance and cost takeout partially offset by workforce restructuring charges of $8 million, the company said. The managed services division signed $1.4 billion of new business during the quarter.

Also of note: Cloud-computing awards in the commercial and public sector reached approximately $400 million year-to-date, an increase of more than 200 percent compared with a year ago, according to CSC's third-quarter earnings, Washington Business Journal reported.

CSC stumbled badly in the MSP market around mid-2011.By May 2012 the company seemed to be regaining its managed services footing. This week's earnings report seems to show more progress.


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