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Computer Sciences Profit Falls, Warns of Uncertain Federal Spending

Company Gets About One-Third of Revenue from Government

By Maria Armental

Computer Sciences Corp. said Thursday that its profit fell in the fiscal first quarter and warned of continued uncertainty over federal spending.

The Falls Church, Va., company gets about a third of its revenue from the government.

Shares fell 2% to $60 in recent after-hours trading.

For the most-recent period, through July 4, the company reported a profit of $151 million, or 98 cents a share, down from $177 million, or $1.14 a share, a year earlier.

Revenue slipped to $2.24 billion.

Analysts had forecast a profit of 94 cents a share on revenue of $3.19 billion.

Operating margin narrowed to 9.4% from 10.2% a year earlier.

The company reported income from continuing operations of $159 million, down from $161 million a year earlier. On a per-share basis, it was unchanged at $1.03.

By segment, the company reported a 3% increase in global business-services revenue to $1.09 billion, as industry software and solutions' sales offset declines in the company's consulting business. Global infrastructure services slipped 1% to $1.13 billion, which the company attributed to price-downs, contract conclusions and restructured contracts. Revenue at its North American public sector fell 3% to $1.02 billion, which the company attributed to continued uncertainty on federal spending.

The company maintained its fiscal 2015 target range for adjusted per-share profit from continuing operations.

Separately, Computer Sciences said it was expanding its alliance with International Business Machines Corp. in a move intended to accelerate customers' transition to the cloud.