NHS car-crash spatters CSC accounts with red ink
'Very poor' results, blubs CEO
The CEO of Computer Sciences Corporation (CSC) said that his company's performance in the last year had been "very poor", as he announced a staggering yearly loss of $4.2 billion.
The loss compares to a profit of $759 million the year before and has pushed the CEO Mike Lawrie to declare cuts of $1 billion.
Revenue for the technology services company had only declined one per cent from last year - it was $15,877 million, down from $16,042 million - but massive costs in 2011 dragged the technology services company deep into the red.
CEO Mike Lawrie said that the results were "very poor" and blamed the $1.5 billion write off charge from the NHS, among other things:
There are many reasons for our under-performance – primarily NHS write-offs and challenges managing our cost structure, aligning our global organization, and in executing some of our MSS contracts. We are also experiencing some market headwinds in the Federal business and in Europe.
The performance pulled share values down: shares made a $27.38 loss per share over the year as a whole.
In the quarterly results also released today, CSC posted a loss of $158 million for the three months ending March 30th 2012. The loss compares to a $171million profit made in the same quarter last year. Revenue for the quarter was also down on last year, falling 2% to $4114 million from $4202 million for the equivalent 2011 quarter.
In a conference call, Lawrie told investors that CSC would cut $1 billion's worth of costs in the next year, Reuters reports. Lawrie gave some hints as to where the fat would be sliced: mentioning 40 under-performing contracts and operating inefficiency:
Our Company is in a turnaround situation and we are taking the first steps on that journey which include remediation plans for under-performing contracts, new leadership, revised compensation plans which reward business performance, implementing a more efficient operating model with updated lines of accountability, restructuring and cost re-balancing activities.
A split of revenue by sector shows that the CSC's income from the public sector, including the department of defence has fallen sharply over the past year, but that the corp had managed to claw back some of the lost income by bumping up its business solutions and managed services sector. ®