US government spending helps CSC raise profit

IT services provider Computer Sciences increased its net income by 36% in the second quarter of 2003, compared with the same...

IT services provider Computer Sciences increased its net income by 36% in the second quarter of 2003, compared with the same quarter last year, thanks in part to strong sales to the US government and to tight internal cost controls.

Revenue declined slightly however, partly because of weak demand from financial services clients and for short-term projects outside North America, particularly in Europe.

Net income for the quarter ending 27 September came in at $92.9m (£59.6m), meeting the consensus estimate from Wall Street analysts polled by Thomson Financial/First Call. In the second quarter last year, CSC had net income of $68.2m.

The quarter closed with $2.7bn in revenue, down 1.2% from last year and below the Thomson Financial/First Call consensus estimate of $2.81bn.

About 75% of CSC's revenue came from sales to the US government and from global sales of outsourcing services, two markets where the company sees "robust" opportunities. In the quarter, revenue derived from the US government rose 16.9%.

Although global outsourcing sales grew, the company has seen "no significant improvement" in demand for IT consulting and systems integration services in North America.

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