The 10-second takeaway
For the quarter ended March 29 (Q4), Computer Sciences missed estimates on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share grew. GAAP earnings per share grew.
Margins expanded across the board.
Computer Sciences booked revenue of $3.70 billion. The 12 analysts polled by S&P Capital IQ anticipated a top line of $3.84 billion on the same basis. GAAP reported sales were 10% lower than the prior-year quarter's $4.11 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 $1.28. The 14 earnings estimates compiled by S&P Capital IQ averaged $0.98 per share. Non-GAAP EPS were $1.28 for Q4 against -$0.14 per share for the prior-year quarter. GAAP EPS were $1.81 for Q4 compared to -$1.02 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 23.3%, 890 basis points better than the prior-year quarter. Operating margin was 7.0%, 610 basis points better than the prior-year quarter. Net margin was 7.6%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $3.66 billion. On the bottom line, the average EPS estimate is $0.70.
Next year's average estimate for revenue is $14.79 billion. The average EPS estimate is $3.45.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 243 members out of 285 rating the stock outperform, and 42 members rating it underperform. Among 87 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 78 give Computer Sciences a green thumbs-up, and nine 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 $45.12.
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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.