Shares of DXC Technology (NYSE:DXC) plunged on Friday after the IT services provider reported its fiscal first-quarter results. The company beat analyst estimates for both revenue and earnings, but it slashed its full-year guidance. As of 11:40 a.m. EDT, the stock was down about 32.5%.
DXC reported first-quarter revenue of $4.89 billion, down 7.4% year over year and $30 million higher than the average analyst estimate. Revenue from the global business services segment fell 2.4% to $2.16 billion, while revenue from the global infrastructure services segment tumbled 11% to $2.73 billion. Currency negatively impacted revenue in both segments.
Non-GAAP (adjusted) earnings per share came in at $1.74, down from $1.93 in the prior-year period but $0.03 better than analysts were expecting. As reported under generally accepted accounting principles (GAAP), net income was $0.61 per share, down from $0.78 per share in the year-ago quarter. GAAP earnings were hurt by restructuring, transaction, separation, and integration-related costs.
While total revenue slumped, digital revenue was up 35% year over year. "We continue to invest in Digital talent, capabilities, and offerings, and we are seeing strong demand for these solutions," said CEO Mike Lawrie in prepared remarks included in the earnings release.
For the full year, DXC now expects revenue between $20.2 billion and $20.7 billion, non-GAAP EPS between $7.00 and $7.75, and adjusted free cash flow equivalent to 90% of non-GAAP net income. That revenue guidance range is $500 million below the company's previous guidance, and the non-GAAP EPS range was lowered by $0.75.
DXC's guidance cut overshadowed better-than-expected first-quarter results, prompting investors to punish the stock.