Computer Sciences CEO Discusses F2Q2011 Results – Earnings Call Transcript
Computer Sciences Corporation (
)
F2Q2011 Earnings Call Transcript
November 10, 2010 11:00 am ET
Executives
Bryan Brady – VP, IR
Mike Laphen – Chairman, President and CEO
Mike Mancuso – VP and CFO
Analysts
Darrin Peller – Barclays Capital
David Grossman – Stifel Nicolaus
Adam Frisch – Morgan Stanley
Joseph Vafi – Jefferies & Company
Joseph Foresi – Janney Montgomery Scott
Bryan Keane – Credit Suisse
Ashwin Shirvaikar – Citi
Jason Kupferberg – UBS
Michael Blaazy [ph] – Buoyant [ph]
Presentation
Operator
Compare to:
Previous Statements by CSC
»
Computer Sciences Corporation F1Q11 (Qtr End 07/02/10) Earnings Call Transcript
»
Computer Sciences Q4 2010 Earnings Call Transcript
»
Computer Sciences Corp. F3Q10 (Qtr End 1/1/10) Earnings Call Transcript
»
Computer Sciences Corporation F2Q10 (Qtr End 10/02/09) Earnings Call Transcript
Good day, everyone and welcome to the CSC fiscal year 2011 second quarter earnings call. Today’s call is being recorded. For opening remarks and introductions, I’d like to turn the call over to Mr. Bryan Brady, Vice President of Investor Relations. Please go ahead, sir.
Bryan Brady
Thank you, operator. Good morning, everyone, and a warm welcome to CSC’s earnings call for the second quarter of fiscal year 2011. We issued our financial results earlier this morning, so hopefully you had a good opportunity to review them.
With me today are Mike Laphen, our Chairman and Chief Executive Officer; and Mike Mancuso, our Chief Financial Officer. As usual, the call is being webcast at csc.com and we’ve also posted slides to our Web site to accompany our discussion.
Moving to slide number 2, you’ll see a reminder that statements made during this call that are not historical facts may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially.
Additional information concerning these risks and uncertainties is contained in the company’s filings with the SEC. Copies of these filings are available from the SEC, from our Web site, and from our Investor Relations department.
On slide number 3 you see our acknowledgement that CSC’s presentation includes certain non-GAAP financial measures. In accordance with SEC rules, a reconciliation of these metrics to GAAP metrics is included in the tables of the earnings release and in the appendix to our slides. Both documents are available for your review at the Investor Relations section of the CSC Web site.
Finally, I’d like to remind our listeners that CSC assumes no obligation to update the information presented on this conference call, except, of course, as required by law.
Now, if you kindly move to slide number four, I am pleased to turn the call over to Mike Laphen.
Mike Laphen
Thank you, Bryan. Good morning, ladies and gentlemen, and thank you for joining us today as we discuss our financial results for the second quarter. We ended our last earnings call indicating that we expected our second quarter revenue to be similar to that of the first quarter and that the majority of this year’s growth would occur in the second half.
Consistent with that earlier view, we delivered modest sequential revenue growth in our second quarter. However, ongoing market improvements, the resolution of a protest on some key public sector awards and the ramp-up of new business initiated in the first half, all reinforce our belief that we will experience meaningful top line growth in our second half.
On the new business front, bookings strengthened to $4.5 billion for the quarter and $7.7 billion for the first half. Based on this first half performance as well as current activity we’ve increased our full year bookings estimate by $500 million.
Across our global commercial businesses, we see definite signs of recovery. Pipelines are building constructively, customers are actively engaging in the exploration of new initiatives, and most importantly buying decisions are being made.
Business utilization and billing rates have improved, and demand for services has increased. Our Consulting pipelines are robust and total three times trailing 12 months revenue.
Win rates remained strong, indicating market acceptance of our vertical and consulting solutions and traction for our BPO and industry focused value propositions.
Accordingly, BSS delivered second quarter year-over-year growth of 6% net of M&A and in constant currency. We expect this growth to continue, if not accelerate in the second half.
Demand for outsourcing services remains positive. MSS revenues increased 2% for the quarter and 2.1% for the half in constant currency. We expect this growth to continue in the second half.
The demand for application management services is particularly strong, and we project that this segment of the business will grow at low double-digit rates year-over-year. The outsourcing pipeline for qualified opportunities scheduled for award by the close of our fiscal year ‘11 $10 to $12 billion, driving our optimism for strong second half bookings.
We are particularly pleased to start off our third quarter by welcoming VF Corporation, the world’s largest apparel company as a new CSC client. Demand for cloud services continues across our markets, and we achieved a number of significant accomplishments.
First, we successfully transitioned over 15,000 users across 36 of the city of Los Angeles’s 40 departments through our Google-based cloud platform. We also recently announced our win on the State of California program for Microsoft BPOS cloud services.
Additionally, we were selected by AMP one of Australia’s leading wealth management companies to implement our cloud based solution for email and collaborative services. This solution is based on the debug technology resulting from our announced alliance with the DCE coalition, a collaboration of CISCO, EMC and VMware.
For our groundbreaking implementation of cloud based to all of services to 28,000 Royal Mail Group employees CSC just received a National Outsourcing Association’s award for innovation in outsourcing. These accomplishments evidence CSC’s leadership position in the implementation of clod services across both the public and private sectors.
Read the rest of this transcript for free on seekingalpha.com
