We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
DXC Technology’s (DXC - Free Report) reported third-quarter fiscal 2021 non-GAAP earnings of 84 cents per share, which beat the Zacks Consensus Estimate by 55.6%. The bottom line, however, declined from the prior-year quarter’s $1.25.
Revenues of $4.29 billion surpassed the consensus mark of $4.22 billion. However, the top line fell 14.6% year over year. Spin-off of its U.S. State and Local Health and Human Services business to Veritas as well as its healthcare software business to Dedalus Group in 2020 led to the year-over-year decline.
DXC Technology Company. Price, Consensus and EPS Surprise
Segment wise, revenues from Global Business Services (“GBS”) slid 18.6% on a year-over-year basis to $1.92 billion. Divestiture of the HHS business in October last year affected revenues from this segment.
Global Infrastructure Services (“GIS”) revenues during the fiscal third quarter came in at $2.31 billion, down 9.9% year over year, reflecting termination of certain customer accounts and price downs.
Within the company’s enterprise technology stack business, ITO layer revenues declined 17.7% year over year on account terminations, price concessions and customer settlements. Cloud and security revenues fell 1%.
Application layer revenues decreased 9.3% year over year.
Adjusted EBIT margin was 7%, contracting 350 basis points year over year.
Balance Sheet and Other Financial Metrics
The company exited the fiscal third quarter with $3.92 billion in cash and cash equivalents compared with the $3.08 billion witnessed in the previous quarter. Long-term debt balance (net of current maturities) decreased to $5.44 billion as of Dec 31 from $8.05 billion as of Sep 30.
During the reported quarter, the company recorded operating and adjusted free cash outflows of $187 million and $318 million, respectively. In the first nine months of fiscal 2021, the company generated operating cash flow of $404 million and adjusted free cash outflow of $209 million.
Outlook
For the fiscal fourth quarter, the company anticipates revenues between $4.25 billion and $4.30 billion. Adjusted EBIT margin is expected in the range of 7% to 7.4%. DXC projects adjusted earnings per share in the band of 65-70 cents.
The long-term earnings growth rate for Apple, Zoom Video Communications and Shopify is currently pegged at 11.5%, 25%, and 32.5%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
DXC Technology (DXC) Tops Q3 Earnings & Revenue Estimates
DXC Technology’s (DXC - Free Report) reported third-quarter fiscal 2021 non-GAAP earnings of 84 cents per share, which beat the Zacks Consensus Estimate by 55.6%. The bottom line, however, declined from the prior-year quarter’s $1.25.
Revenues of $4.29 billion surpassed the consensus mark of $4.22 billion. However, the top line fell 14.6% year over year. Spin-off of its U.S. State and Local Health and Human Services business to Veritas as well as its healthcare software business to Dedalus Group in 2020 led to the year-over-year decline.
DXC Technology Company. Price, Consensus and EPS Surprise
DXC Technology Company. price-consensus-eps-surprise-chart | DXC Technology Company. Quote
Quarter in Detail
Segment wise, revenues from Global Business Services (“GBS”) slid 18.6% on a year-over-year basis to $1.92 billion. Divestiture of the HHS business in October last year affected revenues from this segment.
Global Infrastructure Services (“GIS”) revenues during the fiscal third quarter came in at $2.31 billion, down 9.9% year over year, reflecting termination of certain customer accounts and price downs.
Within the company’s enterprise technology stack business, ITO layer revenues declined 17.7% year over year on account terminations, price concessions and customer settlements. Cloud and security revenues fell 1%.
Application layer revenues decreased 9.3% year over year.
Adjusted EBIT margin was 7%, contracting 350 basis points year over year.
Balance Sheet and Other Financial Metrics
The company exited the fiscal third quarter with $3.92 billion in cash and cash equivalents compared with the $3.08 billion witnessed in the previous quarter. Long-term debt balance (net of current maturities) decreased to $5.44 billion as of Dec 31 from $8.05 billion as of Sep 30.
During the reported quarter, the company recorded operating and adjusted free cash outflows of $187 million and $318 million, respectively. In the first nine months of fiscal 2021, the company generated operating cash flow of $404 million and adjusted free cash outflow of $209 million.
Outlook
For the fiscal fourth quarter, the company anticipates revenues between $4.25 billion and $4.30 billion. Adjusted EBIT margin is expected in the range of 7% to 7.4%. DXC projects adjusted earnings per share in the band of 65-70 cents.
Zacks Rank and Stocks to Consider
DXC currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Apple Inc. (AAPL - Free Report) , Zoom Video Communications (ZM - Free Report) and Shopify (SHOP - Free Report) , all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Apple, Zoom Video Communications and Shopify is currently pegged at 11.5%, 25%, and 32.5%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>