Results boost for CSC

Outsourcing giant CSC has signed $8.8bn (£4.6bn) worth of contracts in its second financial quarter, a figure that has risen from $2.5bn (£1.3bn) last year.

The largest quarterly signings in the company’s history provided a boost to its otherwise flat sales figures of $3.6bn (£1.9bn), up just 0.9 per cent on last year.

CSC chief executive Van Honeycutt says he is pleased with the new business the company is getting from the NHS Connecting for Health IT programme.

‘This plays to one of our major strengths: successfully managing long-term, complex and critically important programmes,’ he said.

Although CSC is not reporting top-line growth, it is keeping operating costs as flat as revenue, says Ovum analyst Phil Codling.

‘CSC’s restructuring programme will have more impact on profits,’ he said. ‘It has already reduced headcount in expensive locations by 2,800 in the past two quarters, saving almost $40m (£21m) in operating costs.’

Codling says the new contract signings should provide a lift in growth next year.

The only negative is the continuing weak performance in Europe, where the company’s sales fell eight per cent, he says.

‘Recent signings show that CSC has not lost its ability to win major bids, and it will use the NHS globally to win new programmes,’ he said.

‘But expect to see CSC putting more emphasis on smaller deals and smaller customers.’

What do you think? Email us at feedback@computing.co.uk

Further reading:

• NHS IT must recover from supplier ills
  
• NHS trust returns to national plan
• Accenture leaves NHS contract