CSC reports 5 percent drop in public-sector revenue

CEO gives frank assessment of "very poor" results.

Computer Sciences Corp.'s CEO Mike Lawrie said May 17 the company is facing the headwinds of a tough federal marketplace, leading to a very poor 2012 for the company.

CSC reported $15.88 billion in revenue for its fiscal 2012, which ended March 30. It’s 1 percent down from fiscal 2011 revenue of $16.04 billion. For the final quarter of 2012, the company reported $4.11 billion in revenue, 2 percent lower than the $4.2 billion in revenue for the last quarter of 2011.

Across the three lines of business, new business awards for the fourth quarter totaled $6.3 billion—one of the few highlights of the year. The managed services sector reported $4 billion of new business, North American public sector contributed $1.2 billion, and business solutions and services closed $1.1 billion of new business.

For the quarter, North American public sector revenue was $1.4 billion, down 6.6 percent from the fourth quarter last year. For the year, revenue was $5.7 billion, down 5 percent from last year. In 2012, revenues from Defense Department work fell from $4.3 billion in 2011 to $3.86 billion. Among civilian agencies, revenues increased by 7 percent to $1.62 billion for the year.

Overall, “we consider these results to be very poor as the company is executing well below an acceptable level for CSC and its investors,” Lawrie said.

The performance problem is due primarily to the U.K. National Health Service write-offs. CSC has also had challenges managing the company’s cost structure, aligning its global organization, and carrying out some of MSS contracts, he said.

CSC, of Falls Church, Va., ranked No. 11 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.