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CSC Posts 17% Jump in Profit

August 13, 2003|Terril Yue Jones | Times Staff Writer

Information technology services provider Computer Sciences Corp. reported a 17% jump in fiscal first-quarter profit Tuesday on the strength of increased revenue from federal government contracts.

The El Segundo firm, which manages computer systems for clients such as the Defense Department and Visa International Inc., said net income was $92.3 million, or 49 cents a share, up from $79 million, or 46 cents a share, in last year's first quarter. Sales in the three months ended July 4 rose to $3.55 billion from $2.75 billion a year earlier.

The boost in government-contract revenue came partly from CSC's March acquisition of DynCorp, a technology services firm that does extensive work for the U.S. government and military. In April, the subsidiary won a $150-million contract to train a new Iraqi police force.

In a conference call with analysts, CSC Chief Executive Van B. Honeycutt credited contracts involving homeland security, missile defense and Army logistics for boosting revenue. But sales to corporate customers were flat.

For The Record
Los Angeles Times Saturday August 16, 2003 Home Edition Main News Part A Page 2 National Desk 2 inches; 86 words Type of Material: Correction
Computer Sciences Corp. -- An article in the Business section Wednesday about Computer Sciences Corp.'s earnings incorrectly stated that Visa International Inc. is a customer of CSC. Visa International used to be a CSC customer but isn't anymore. In addition, the story incorrectly stated that a contract CSC's DynCorp subsidiary won to train a new Iraqi police force was worth $150 million. It is worth $50 million. The error also was made in a May 5 article in Section A about U.S. reconstruction efforts in Iraq.

"The government business is very stable and predicable," said Brett Manderfeld, an analyst at U.S. Bancorp Piper Jaffray. "But there is still weakness in the project-based IT commercial business."

CSC shares, which rose 93 cents to $43.62 on the New York Stock Exchange on Tuesday, fell to $42 in extended trading after the results were announced.

For the current quarter, CSC said it expected earnings per share of 58 cents to 60 cents.

New contracts worth $4.3 billion were announced during the quarter. CSC also said Tuesday that it won a six-year contract to manage mainframe computers for aerospace giant Boeing Co., a deal worth as much as $90 million.

Reuters was used in compiling this report.

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