Profit Rises at Computer Sciences

But the company guides revenue lower for the fourth quarter.
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Third-quarter profit rose at

Computer Sciences

(CSC)

as the company beat earnings-per-share predictions but fell short on revenue.

The IT services provider said net income for the quarter ended Dec. 30 tallied $203.5 million, or $1.08 a share, which included a discontinued-operation gain of $38.4 million, or 20 cents a share.

Excluding the gain, the company earned 88 cents a share, above Thomson First Call's consensus expectation of 85 cents a share.

Revenue rose 2.5% $3.58 billion, up 2.5% from the same time last year and below analysts' expectations of $3.8 billion.

The company attributed its revenue growth to contracts with the U.S. government, led by the Department of Defense, and gains in U.S. consulting and systems integration agreements. Operations in Asia and Australia also contributed to revenue growth for the quarter.

"The market for U.S. federal government information technology services continues to demonstrate solid demand," Van Honeycutt, CSC chairman and CEO, said in a statement. "Over the next 14 months, through fiscal 2007, our U.S. federal pipeline of opportunities is approximately $28 billion, comprised of about 390 programs from a broad range of government agencies and departments."

For the current fourth quarter, CSC expects $3.8 billion in revenue, with earnings per share in the range of $1.10 to $1.14. Analysts were expecting revenue of $4.1 billion and earnings of $1.13 a share.

For fiscal year 2006, the company estimates it will make between $3.27 and $3.31 a share, with sales of approximately $14.6 billion. Analysts polled by Thomson First Call predict $3.26 a share and $15 billion in revenue.

Following the release, shares of Computer Sciences rose 48 cents, or 1%, in after-hours trading to $49.80.