Updated from Nov. 9

High government spending helped

Computer Sciences

(CSC)

push second-quarter revenue up 9.6% and beat Wall Street's earnings estimates by 2 cents.

The strong performance, which was also helped by robust outsourcing activity in Europe, pleased Wall Street; in recent trading shares were up $2.87, or 5.8%, to $53.

The company said after the bell Tuesday that it earned a profit of $130.5 million, or 68 cents per diluted share, on sales of $3.9 billion. Analysts polled by Thomson First Call were expecting a profit of 66 cents and revenue of $3.87 billion. Last year's income included a 3-cent after-tax special charge.

A year ago, Computer Sciences earned $108.1 million, or 57 cents a share, on sales of $3.59 billion.

In addition, free cash flow rose by $20 million to $163 million -- a surprise to several analysts.

For the third quarter, Computer Sciences expects revenue growth of approximately 8% to 10% -- roughly in line with current estimates -- and said it is comfortable with the current range of analysts' earnings estimates of 77 cents to 82 cents a share.

For full fiscal 2005, the company's expectations remain unchanged, anticipating revenue to be up about 8% to 10%, which would be from just under $16 billion to about $16.25 billion, and expecting earnings per share of $3.10 to $3.20.

The third quarter seems off to a strong start: $2.6 billion in deals have been signed, including two for about $1 billion each. "It appears the company is on track to convert its considerable backlog to deal signings," commented Deutsche Bank analyst Brandt Sakakeeny. (Deutsche Bank has an investment banking relationship with Computer Sciences.)