Apps & Software

CSC Moves From Turnaround to Value Trap (CSC)

Computer Sciences Corporation (NYSE: CSC) is what Scarface might call a pig which won’t fly straight. The company’s stock is getting punished all over again after things looked as though they were on the mend.  A fresh earnings warning is to blame.

In a move that is becoming almost too routine here, CSC’s management team announced that the company would now be posting a loss in the fiscal fourth quarter.  If this company is going to post a loss then it cannot even be counted as a value stock.  This is where value in technology became a value trap of magnificent proportions.  The company talked about a much weaker than expected outlook on core earnings as well.  That U.K. pact continues to be an issue: The U.K. National Health Services contract was supposed to be at an agreement by the end of March but CSC noted on Tuesday evening that the two parties have not yet reached a binding agreement and that discussions are continuing.

CSC shares are paying the price for this today.  Shares are down over 7% at $26.05 and the 52-week trading range is $22.80 to $51.43.

JON C. OGG

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