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Computer Sciences Management Discusses Q4 2012 Results - Earnings Call Transcript

Let me make a couple remarks before I turn this over to Mike. I've really got 4 key messages this morning. One is that our results are very poor, and they are unacceptable to us at CSC, and they're certainly unacceptable to our investors. The second message is that we are taking immediate actions to begin to move in a different direction. I will cover some of those actions today, and there'll be some more actions in the coming weeks and months. The third message is that although the negatives overwhelmed our results, there are some bright spots, and I do want to highlight some of those bright spots, particularly around some of our new offerings that I think represents the future of the company. And then the final message is that I've now completed a sort of tour of the world and visited many of our sites and many of our clients, many of our investors and many of the analysts that follow CSC, and have a pretty good handle on what the issues are, what the root causes of those issues are. And we are developing a plan to address these, as well as the underlying financial model. And we intend to share that in greater detail when we get together in early September for the Analyst/Investor Day.

So those are the 4 key messages. Now let me just quickly provide a little more detail around each of those messages. And as I said several weeks ago and again today, the results are very poor. The primary reasons for that are the NHS write-offs. The second principal driver was troubled contracts within our MSS business that resulted in impairment and restructuring charges. I don't think we managed our cost structure to adjust for some of these developments as they unrolled themselves throughout the second half of the fiscal year. I think we've got some organizational, what I call operating model alignment issues, which has made execution that much more problematic. And obviously, we continue to see some uncertainty, particularly in the federal sector and in EMEA. So those are the primary causes of the poor results, not substantially different than what we talked about before.

Read the rest of this transcript for free on seekingalpha.com

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