The 10-second takeaway
For the quarter ended Dec. 28 (Q3), Computer Sciences met expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share grew.
Margins grew across the board.
Computer Sciences notched revenue of $3.78 billion. The 13 analysts polled by S&P Capital IQ hoped for revenue of $3.75 billion on the same basis. GAAP reported sales were 0.5% higher than the prior-year quarter's $3.76 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 $0.77. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.62 per share. GAAP EPS were $3.27 for Q3 versus -$8.96 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 20.8%, 680 basis points better than the prior-year quarter. Operating margin was 6.3%, 760 basis points better than the prior-year quarter. Net margin was 13.5%, 5,040 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $3.91 billion. On the bottom line, the average EPS estimate is $0.85.
Next year's average estimate for revenue is $15.37 billion. The average EPS estimate is $2.55.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 246 members out of 290 rating the stock outperform, and 44 members rating it underperform. Among 92 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 82 give Computer Sciences a green thumbs-up, and 10 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 $37.96.
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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 position in any of the stocks mentioned. 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.