What happened

Shares of DXC Technology (DXC -0.78%) are soaring on an otherwise bearish Thursday, up 14% as of 1:40 p.m. ET following the release of fiscal third-quarter 2022 results that merely met expectations. Against a backdrop of other earnings concerns though, meeting estimates is a relative victory.

So what

For the three-month stretch ending in December, technology consulting and services outfit DXC turned nearly $4.1 billion worth of revenue into a per-share profit of $0.38, or $0.92 per share on an adjusted basis. The figures were in line with analysts' consensus estimates, though sales fell from the year-ago comparable of nearly $4.3 billion. Non-GAAP (adjusted) earnings, however, improved from $0.84 per share in the final quarter of 2020.

Rising bar chart with an arrowed trend line.

Image source: Getty Images.

Guidance for the year now underway was also encouraging... sort of. While the company adjusted its 2022 revenue contraction from a range of 1% to 2% to a range of 2.2% to 2.3%, analysts are still modeling a 7.1% decline for DXC Technology's revenue this year. The market's also expecting an average profit of $3.67 per share this year, squarely in the middle of the company's guidance range of $3.64 and $3.69.

In light of the red flags now being waved by Meta Platforms and PayPal Holdings, DXC's achievable targets position it in investors' minds as a relative safer winner.

Now what

DXC Technology's top and bottom lines have been steadily shrinking since 2018, and that's not going to change this year. But shares have also lost ground in step with that contraction. This sets the stage for a recovery in the stock's price should DXC be able to turn its business around and start growing again.

And this may well be what's in store. Shares have rallied from a bottom made back in early 2022, suggesting investors see this turnaround on the horizon. Slightly smaller revenue declines are also evidence that the company is on the mend, as is profit growth.

While today's sharp surge makes it tough for the stock to log more gains right away, it does remind the market that this is a name worth adding to watch lists as a potential purchase in the foreseeable future.