Guidance Trips Computer Sciences

Looking ahead to the first quarter of 2007, CSC said EPS would be in the mid-60-cent range, excluding options, and sales will range from $3.4 billion to $3.5 billion. The company said it expects to record a first-quarter options expense of 4 cents a share. Analysts had anticipated that the company would earn 69 cents a share on sales of $3.71 billion.

For full fiscal 2007, CSC said EPS would be between $3.61 and $3.71, including options. Analysts had pegged the company to make $3.62 a share. The company said revenue would be up 2% to 3% for the year, suggesting revenue of $14.9 billion to $15 billion. Analysts were calling for $15.36 billion on the top line.

During the call, Honeycutt also addressed the latest issue troubling the financial world: the back-dating of stock options. He said CSC grants stock options annually at the end of the fiscal year, usually in May. Options are also granted from time to time for promotions and new hires. He said the company believes it is in compliance with all the rules and regulations regarding stock options practices.

CSC shares closed the regular session down 66 cents, or 1.2%, to $54.69.