DXC Technology (DXC) topped Q4 Revenue and Revenue Estimates
DXC technology DXC reported non-GAAP earnings of 74 cents per share for the fourth quarter of fiscal 2021, which beat Zacks’ consensus estimate by 5.71%. Net income, however, declined from $ 1.20 per share in the prior year quarter.
Revenue of $ 4.39 billion exceeded the consensus mark of $ 4.29 billion. However, the top line fell 8.9% year over year. The split of its US and US healthcare and social services business to Veritas as well as its healthcare software business to Dedalus Group in 2020 resulted in a year-over-year decline.
In fiscal 2021, DXC reported revenue of $ 17.73 billion, down 9.4% year-over-year.
DXC technology company. Price, consensus and surprise EPS
DXC technology company. surprise-graph-price-consensus-eps | DXC technology company. Quote
Neighborhood in detail
By segment, Global Business Services (“GBS”) revenues slipped 13.4% on an annual basis to $ 2 billion. The divestiture of the HHS business in October last year affected revenues in this segment. However, the growth of analytics and engineering, applications and business process solutions has been on hold.
Global infrastructure services (“GIS”) revenues in the third quarter of the fiscal year were $ 2.39 billion, down 4.8% year-over-year, reflecting drops in the cloud and security and the modern workplace. However, the growth of IT outsourcing has been positive.
Adjusted EBIT margin was 7.5%, increasing 50 basis points sequentially.
Balance sheet and other financial measures
The company exited the fiscal third quarter with $ 2.97 billion in cash and cash equivalents, up from $ 3.92 billion in the previous quarter. The long-term debt balance (net of current maturities) declined to $ 4.35 billion as of March 31, from $ 5.44 billion as of December 31.
During the current quarter, the Company recorded adjusted operating cash outflows and free cash outflows of $ 280 million and $ 443 million, respectively. In fiscal 2021, the company generated operating cash flow of $ 124 million and adjusted free cash outflow of $ 652 million.
For the first quarter of fiscal 2022, the company expects revenues to range between $ 4.08 billion and $ 4.13 billion. The adjusted EBIT margin is expected to be between 7.4% and 7.8%. DXC projects adjusted earnings per share in the 72 to 76 cent range.
For fiscal 2022, DXC expects a revenue range of $ 16.6 billion to $ 16.8 billion and adjusted earnings of $ 3.45 to $ 3.65 per share.
Rank Zacks and actions to consider
DXC currently carries a Zacks # 3 (Hold) rank.
Top-ranked stocks in the broader tech sector include Silicon Motion Technology Corporation SIMO, Lam Research Corporation LRCX and LG Display Co., Ltd. LPL, all currently sporting a Zacks # 1 (Strong Buy) rank. You can see The full list of current Zacks # 1 Rank stocks here.
The long-term profit growth rate of Silicon Motion Technology Corporation, Lam Research and LG Display is currently pegged at 8%, 32.8% and 32.56%, respectively.
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