The 10-second takeaway
For the quarter ended Dec. 30 (Q3), Computer Sciences met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share contracted to a loss.
Margins shrank across the board.
Computer Sciences reported revenue of $3.97 billion. The 11 analysts polled by S&P Capital IQ wanted to see revenue of $3.99 billion. GAAP sales were 5.8% lower than the prior-year quarter's $4.0 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $1.35. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.58 per share on the same basis. GAAP EPS were -$8.96 for Q3 compared to $1.54 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was -20.0%, 3,940 basis points worse than the prior-year quarter. Operating margin was -35.7%, 4,230 basis points worse than the prior-year quarter. Net margin was -36.9%, 4,300 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $4.22 billion. On the bottom line, the average EPS estimate is $1.17.
Next year's average estimate for revenue is $16.25 billion. The average EPS estimate is $3.80.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 263 members out of 303 rating the stock outperform, and 40 members rating it underperform. Among 91 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 83 give Computer Sciences a green thumbs-up, and eight give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Computer Sciences is hold, with an average price target of $28.17.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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