The 10-second takeaway
For the quarter ended June 29 (Q1), Computer Sciences beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share contracted significantly.
Gross margins increased, operating margins improved, net margins contracted.
Computer Sciences reported revenue of $3.96 billion. The 12 analysts polled by S&P Capital IQ expected a top line of $3.89 billion on the same basis. GAAP reported sales were 1.9% lower than the prior-year quarter's $4.03 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.36. The 13 earnings estimates compiled by S&P Capital IQ averaged $0.22 per share. GAAP EPS of $0.26 for Q1 were 78% lower than the prior-year quarter's $1.17 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 17.8%, 120 basis points better than the prior-year quarter. Operating margin was 3.8%, 70 basis points better than the prior-year quarter. Net margin was 1.0%, 350 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $3.87 billion. On the bottom line, the average EPS estimate is $0.42.
Next year's average estimate for revenue is $15.63 billion. The average EPS estimate is $2.05.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 261 members out of 305 rating the stock outperform, and 44 members rating it underperform. Among 86 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 75 give Computer Sciences a green thumbs-up, and 11 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 $28.05.
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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. The Motley Fool has no positions in the stocks mentioned above. 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.