DOW JONES NEWSWIRES
A pair of information technology companies reported lower net
income late Friday, with Computer Sciences Corp. (CSC) posting a
10% drop on lower revenue and Fidelity National Information
Services Inc. (FIS) recording a 73% slump on losses from
discontinued operations.
IT providers generally rely on a steady stream of recurring
revenue, which will help them through the economic downturn, but
weakness in the U.S. financial sector can still affect the
companies.
Last month, International Business Machines Corp.'s (IBM)
results comfortably topped Wall Street's expectations, but Intel
Corp. (INTC) reported poor results amid a write-down and declined
to give an outlook, in a sign of how difficult it is to predict the
depth of the current downturn.
For the fiscal third quarter ended Jan. 2, CSC reported net
income of $160.6 million, or $1.06 a share, down from $179 million,
or $1.05 a share, a year earlier. The per-share figure rose as
shares outstanding dropped 11%.
Revenue declined 5% to $3.95 billion.
In November, CSC projected earnings of $1 to $1.10 a share on
revenue of $4.1 billion to $4.2 billion.
The company received nearly $2.7 billion in new awards during
the quarter, with the fiscal-year-to-date total up 21%.
Looking ahead, the company declined to offer a fourth-quarter
view, saying uncertainty in the economic climate, volatility in
currency-exchange rates and tax examinations made it difficult to
predict its earnings performance for the quarter. But it expects
the year's results to be at the low end of November's view.
Meanwhile, Fidelity reported fourth-quarter net income of $28.8
million, or 15 cents a share, down from $108.4 million, or 55 cents
a share, a year earlier.
Excluding trademark write-downs at its Certegy check-services
business and acquisition-related costs, among other items, earnings
from continuing operations rose to 48 cents a share from 34 cents,
in line with the company's October forecast.
Processing and services revenue rose 0.8% to $862 million for
the financial data-processing company; the increase would have been
4.3% on a constant-currency basis. Analysts expected $871
million.
"Our management team and employees have done an excellent job
managing through a very difficult environment to achieve these
results," said Chairman William P. Foley II.
Looking ahead, Fidelity expects 2009 earnings of $1.60 to $1.66
a share and revenue to be flat to up 2%. Analysts, on average,
projected earnings of $1.60 a share and 3% revenue growth to $3.55
billion. First-quarter earnings are seen between 30 cents and 32
cents a share on revenue of $820 million to $830 million. Street
estimates were 32 cents and $840 million, respectively.
Shares of CSC were down 0.9% in after-hours trading at $38.48,
while Fidelity's were flat at $16.54.
-By John Kell and Kevin Kingsbury, Dow Jones Newswires;
201-938-5285; john.kell@dowjones.com