Computer Sciences Earnings Rise on Tax Gain

A hefty tax gain boosted Computer Sciences' second-quarter net income and the U.S. technology services provider said it was confident it could weather the economic storm.

But CSC, which provides information technology and outsourcing services to companies and government agencies, gave a third-quarter forecast that was lower than Wall Street estimates, and Chief Executive Michael Laphen said the company would be cautious in making decisions.

"Clearly, we must remain cautious regarding the future impacts of current macroeconomic conditions and currency fluctuations," Laphen said in a statement. CSC said it is poised to "quickly assist" customers to cut costs and improve profitability.

Separately, the Falls Church, Virginia -based company said Michael Mancuso, the former chief financial officer of General Dynamics , would join CSC as vice president and CFO from Dec. 1.

Mancuso replaces Donald DeBuck, who served as interim CFO since February, and will continue in his role as vice president and corporate controller.

Net Income and Revenue

CSC secured $4.6 billion of new business orders during the fiscal second quarter.

Its net income was $451.7 million, or $2.95 per share, compared with $75.8 million, or 43 cents per share a year ago.

A tax benefit of $371.4 million due to a resolution with the Internal Revenue Service added $2.43 to CSC's per-share earnings.

Excluding the tax benefit and other items, CSC earned 72 cents per share, which was within its previously forecasted range of 70 cents to 80 cents, but fell short of Wall Street estimates of 75 cents per share, according to Reuters Estimates.

Revenue grew 5.5 percent from the previous year's quarter to $4.24 billion, just short of the lower end of CSC's previously issued outlook of $4.25 billion and $4.35 billion.

Analysts were expecting the company to earn revenue of $4.27 billion, according to Reuters Estimates.

Shares in the company were flat in extended trade, after closing on the New York Stock Exchange at $27.97.

For the third quarter, CSC said it expects to earn between $1 and $1.10 per share on expected revenue of between $4.1 billion to $4.2 billion.

Analysts expect it to earn $1.13 per share for the third quarter.

For the full year, CSC expects between $16.8 billion and $17.8 billion in revenue.

It expects earnings per share for the full year of between $6.30 and $6.40, higher than the range of $4.20 to $4.40 per share it issued in the first quarter. It raised the forecast to reflect the tax benefit.

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