CSC CEO: Conviction Around Rationale For HPE Enterprise Services Merger Has Grown Stronger


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"I feel much stronger about the hand we're holding now than the hand we were holding three to four years ago," Lawrie said.

Acquisitions have accelerated CSC's position in next-generation technologies, Lawrie said, as well as the company's Quick Start offerings, which the company launched in May and are geared toward mid-size enterprise customers.

Lawrie said that slightly smaller customers require a more standardized offering that can be quickly priced and configured to provide a higher level of certainty around delivery. CSC has found this sales coverage model to be much more cost-effective, Lawrie said, and is crediting it for driving increased automation.       

The solution provider saw Global Business Services (GBS) sales climb 14.1 percent from $919 million in last year's first fiscal quarter to $1.05 billion in this year's first fiscal quarter, thanks to the acquisitions of Australia-based UXC Limited and U.K.-based Xchanging, both of which closed in May.

Sequential-quarter consulting revenue climbed by 24 percent thanks to the recent acquisitions, Lawrie said, while industry software and solutions revenue grew by 13 percent sequentially due to the addition of Xchanging's leading software business. Big data revenue improved by 5 percent sequentially, Lawrie said, while applications revenue inched ahead by 1 percent sequentially.

Global Infrastructure Services (GIS) revenue, though, fell 0.5 percent from $885 million last year to $881 million this year as contract completions and price declines outpaced growth in next-generation software and services and contributions from recent acquisitions. 

Revenue from next-generation offerings soared by 110 percent on a year-over-year basis, Lawrie said, with sales of CSC's MyWorkStyle virtualized desktop service climbing by 70 percent and revenue from CSC's next-generation network service, delivered in partnership with AT&T, growing by 100 percent. Storage-as-a-Service revenue is 2.5 times where it was a year earlier, Lawrie said.

CSC's stock climbed 0.1 percent to $48.07 per share in after-hours trading Monday. Earnings were announced after the market closed.

For the 2017 fiscal year - which ends March 31, 2017 - CSC expects to deliver earnings from continuing operations of $2.75 to $3 per share, with overall revenue increasing by double digits after factoring for changes in foreign currency exchange rates. GBS revenue is expected to climb sharply, while GIS revenue is projected to decline in the low single digits.


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