US titan CSC – you remember, the firm that botched the £10.1bn National Programme for IT – is bleeding out slowly, with revenues dwindling and income growth stalling.
The bad news for investors and staff respectively is that things are not forecast to get better any time during this fiscal year, and the company is again accelerating a cost reduction programme.
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The integrator confirmed revenue for Q1, which ended 4 July, was $3.24bn, down one per cent year-over-year as reported or down two per cent in constant currency.
The Global Business Services division swelled by three per cent to $1.09bn, which CSC said was down to "growth in software and services" as the consulting element stumbled, falling 10 per cent.
Trade at Global Infrastructure Services was down one per cent to $1.13bn - or down three per cent excluding the currency impact - “due to price-downs, contract conclusions and restructured contracts”.
The North American Public Sector wing fell three per cent to $1.02bn, “reflecting continued uncertainty in the budget environment at the Department of Defence and other Federal government agencies”.
Operating profits dropped to $304m from $332m in the prior year, and net income was down by $2m to $159m.
CEO Mike Lawrie said CSC is "continuing to position" the biz towards areas of the market where the shift to cloud is happening more rapidly.
"Clients are clearly seeking to modernise their applications and orchestrate workloads across multiple cloud environments, which are much more agile and cost effective," he said in a results conference calls.
CSC has built links to AWS, Microsoft and VMware to flog its services via their cloudy platforms, and has partnered with US telco AT&T to "transition our network management and create the foundation for a hybrid cloud environment".
It is also putting more cash into its public BizCloud and integrated its ServiceMesh Agility Platform with services from the three cloud vendors above as well as from IBM.
Lawrie claimed the firm is "upgrading" its sales force – we presume he is referring to training rather than bringing in robots – and increasing the amount of business it bids on.
He said the company is making "significant investments to help reignite our revenue engine to bring to market our next generation services".
But for the year, CSC is forecasting "modest commercial" revenue growth and "mid-single-digit declines" in its US public sector sales. As a result, the firm is once more looking to slash overheads.
"We expect our cost takeout to ramp up over the course of the year," said the CEO. ®