courtesy DXC via Business Wire
DXC's president and CEO, Mike Salvino.

DXC Technology (DXC - Get Report) shares were sharply lower on Thursday after the provider of technology-consulting services to business and government named a new president and CEO.

The stock was trading down 12% at $32.01.

Mike Lawrie, who has been chairman, president and CEO since the Tysons, Va., company started up in 2017, said he would step down as president and CEO immediately and as chairman at year's end.

DXC named Mike Salvino, who sits on DXC's board and most recently was a managing director at private-equity firm Carrick Capital Partners, to succeed Lawrie in the top two executive posts. Salvino's resume also includes a tenure at the consulting firm Accenture. 

Analyst Don Bilson at Gordon Haskett said in a note that the succession announcement was "somewhat [sudden]."

"DXC's stumbles over the past year probably hastened this move. ... Top-line issues have helped crush this stock, and at about $35 it has lost almost two-thirds of its value since last fall," the analyst said. In late September 2018, DXC shares traded as high as $96.75.

"And it is now losing a CEO who has created a lot of value over the years, even if the past 12 months have put a dent in those gains," Bilson wrote.

At CFRA Research, analyst David Holt affirmed his hold rating on the stock, saying that Salvino's experience "as chief executive of operations at the leading IT consulting firm Accenture could come in handy, as DXC attempts to make a similar transition away from legacy outsourcing and towards digital work." 

For its fiscal first quarter ended June 30, DXC reported earnings per share fell 32% to 61 cents from 90 cents in the year-earlier period. Adjusted earnings from continuing operations were $1.74 a share against $1.93.

Revenue dropped 7.4% to $4.89 billion from $5.28 billion.


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