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DXC Technology’s (DXC - Free Report) reported fourth-quarter fiscal 2021 non-GAAP earnings of 74 cents per share, which beat the Zacks Consensus Estimate by 5.71%. The bottom line, however, declined from the prior-year quarter’s $1.20 per share.
Revenues of $4.39 billion surpassed the consensus mark of $4.29 billion. However, the top line fell 8.9% 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.
During fiscal 2021, DXC recorded revenues of $17.73 billion, down 9.4% year on year.
DXC Technology Company. Price, Consensus and EPS Surprise
Segment-wise, revenues from Global Business Services (“GBS”) slid 13.4% on a year-over-year basis to $2 billion. Divestiture of the HHS business in October last year affected revenues from this segment. However, growth in Analytics and Engineering, Applications, and Business Process Solutions was a breather.
Global Infrastructure Services (“GIS”) revenues during the fiscal third quarter came in at $2.39 billion, down 4.8% year over year, reflecting declines in Cloud and Security, and Modern Workplace. However, growth in IT Outsourcing was a positive.
Adjusted EBIT margin was 7.5%, advancing 50 basis points sequentially.
Balance Sheet and Other Financial Metrics
The company exited the fiscal third quarter with $2.97 billion in cash and cash equivalents compared with the $3.92 billion witnessed in the previous quarter. Long-term debt balance (net of current maturities) decreased to $4.35 billion as of Mar 31 from $5.44 billion as of Dec 31.
During the reported quarter, the company recorded operating and adjusted free cash outflows of $280 million and $443 million, respectively. During fiscal 2021, the company generated operating cash flow of $124 million and adjusted free cash outflow of $652 million.
Outlook
For the first quarter of fiscal 2022, the company anticipates revenues between $4.08 billion and $4.13 billion. Adjusted EBIT margin is expected in the range of 7.4-7.8%. DXC projects adjusted earnings per share in the band of 72-76 cents.
For the full-year fiscal 2022, DXC expects a revenue range of $16.6 to $16.8 billion, and adjusted earnings of $3.45-$3.65 per share.
The long-term earnings growth rate for Silicon Motion Technology Corporation, Lam Research and LG Display is currently pegged at 8%, 32.8% and 32.56%, respectively.
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DXC Technology (DXC) Tops Q4 Earnings & Revenue Estimates
DXC Technology’s (DXC - Free Report) reported fourth-quarter fiscal 2021 non-GAAP earnings of 74 cents per share, which beat the Zacks Consensus Estimate by 5.71%. The bottom line, however, declined from the prior-year quarter’s $1.20 per share.
Revenues of $4.39 billion surpassed the consensus mark of $4.29 billion. However, the top line fell 8.9% 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.
During fiscal 2021, DXC recorded revenues of $17.73 billion, down 9.4% year on year.
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 13.4% on a year-over-year basis to $2 billion. Divestiture of the HHS business in October last year affected revenues from this segment. However, growth in Analytics and Engineering, Applications, and Business Process Solutions was a breather.
Global Infrastructure Services (“GIS”) revenues during the fiscal third quarter came in at $2.39 billion, down 4.8% year over year, reflecting declines in Cloud and Security, and Modern Workplace. However, growth in IT Outsourcing was a positive.
Adjusted EBIT margin was 7.5%, advancing 50 basis points sequentially.
Balance Sheet and Other Financial Metrics
The company exited the fiscal third quarter with $2.97 billion in cash and cash equivalents compared with the $3.92 billion witnessed in the previous quarter. Long-term debt balance (net of current maturities) decreased to $4.35 billion as of Mar 31 from $5.44 billion as of Dec 31.
During the reported quarter, the company recorded operating and adjusted free cash outflows of $280 million and $443 million, respectively. During fiscal 2021, the company generated operating cash flow of $124 million and adjusted free cash outflow of $652 million.
Outlook
For the first quarter of fiscal 2022, the company anticipates revenues between $4.08 billion and $4.13 billion. Adjusted EBIT margin is expected in the range of 7.4-7.8%. DXC projects adjusted earnings per share in the band of 72-76 cents.
For the full-year fiscal 2022, DXC expects a revenue range of $16.6 to $16.8 billion, and adjusted earnings of $3.45-$3.65 per share.
Zacks Rank and Stocks to Consider
DXC currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Silicon Motion Technology Corporation (SIMO - Free Report) , Lam Research Corporation (LRCX - Free Report) and LG Display Co., Ltd. (LPL - 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 Silicon Motion Technology Corporation, Lam Research and LG Display is currently pegged at 8%, 32.8% and 32.56%, respectively.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>