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CSC returns to profitability

Kathleen Hall

Beleaguered software firm CSC has returned to profitability in its full year results, posting operating profits of $900m (£600m) compared with losses of $1.36bn for the previous year 2011-12.

In its filing, the company reported a sales drop of 2.4% for the year due to a number of divestments as part of its restructuring programme.

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The return to profitability follows a $1.5bn write off in 2011-2012 of the money CSC had invested in the troubled National Programme for IT (NPfIT).

Under the deal last year with the Department of Health, NHS organisations were freed from exclusively using CSC’s Lorenzo systems.

Mike Lawrie, president and CEO of SCS said: "During fiscal 2013, CSC delivered on its commitments and made significant strides in transforming our company. We returned to profitability and exceeded our targets for cost takeout, operating margin expansion, EPS and free cash flow growth."

Tola Sargeant, analyst at TechMarketView said it was hard to glean the impact of the NHS contract termination on CSC from the company's most recent results.

“CSC seems to have put the worst of the National Programme for IT in the NHS debacle behind it - indeed Lawrie talked of 'strong growth' from NHS bookings during the year on the analyst call today,” she said.

However, the company warned that it could not guarantee future growth. 

“Our business may be adversely affected as a result of changes in demand, both globally and in individual market segments, for IT outsourcing, business process outsourcing and consulting and systems integration services. In addition, worldwide economic weakness and uncertainty could adversely affect our revenue and expenses,” it said in the filing to the Securities and Exchange Commission.

Lawrie said: "For fiscal year 2014, our plans include continued cost takeout, investing in our people, expanding market coverage, pursuing delivery excellence and driving innovation with our clients."

 


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