CSC's earnings drop

The federal sector provided one of the few bright spots for Computer Sciences Corp. in the fourth quarter, which ended March 31. Overall, the company had little revenue growth and a huge drop in net income.

CSC posted revenue of $3.88 million compared with $3.878 for the fourth quarter of last year. However, net income declined 51.5 percent to $199.4 million, or $1.05 per diluted share, from $411.8 million, or $2.13 per diluted share last year. This year’s net income reflects special charges including a $15.2 million charge related to a commercial contract. Last year’s fourth-quarter profit received a $229.5 million after-tax boost from CSC’s divestiture of its DynCorp business units.

Fourth-quarter revenue for CSC’s federal operation increased 13.3 percent to $1.37 billion from $1.21 billion last year. The company’s Defense Department business grew 21.7 percent to $919.5 million compared with $755.3 million a year ago.

CSC officials said a number of contracts fueled CSC’s government revenue growth. Those include the Army’s Rapid Response program, the Air Force’s C-21 program, the Navy’s Atlantic Undersea Test and Evaluation Center contract, and the Army’s Logistics Modernization Program.

“Our U.S. federal business continues to be robust,” noted Van Honeycutt, CSC’s chairman and chief executive officer. As for future prospects, Honeycutt said the company’s federal opportunity pipeline over the next 22 months consists of nearly 500 programs valued at about $37 billion.