Record Book to Bill. What a crock. If the book to bill average is >1 why do revenues continue to decline? While the margins are improving the business is shrinking. The positive cash flow is largely down to selling stuff. The share price is propped up by buy backs and the staff cuts continue while pay goes backward. Shrinking to greatness. Good on you Mike, Mary, VInod, Chris and all the other over paid goons running the show.
31 replies (most recent on top)
DXC's D-mb Investor
"Either way this is all besides the point if DXC keeps selling assets for above book value. Stabilizes the revenue and keeps buying back shares then DXC will go up. Its really just a matter of math."
I read this carefully a few times but failed to notice the word "employee" or "raise" anywhere ... am I missing something?
D-mb Investor - are you serious? What happens when the all the assets are gone? I think you need to revisit Buffet and get a better understanding of his use of margin and management. Or are you waiting until there are no assets at DXC? What will new management build on? DXC is already a "value stock" but time is running out for a new management team to turn it around. Many of its best assets have walked, quiet quit or are now engaged in what Forbes called "resentee-ism". The share price will not go up because the assets that generate value will have been sold or are not productive. You may need to revisit share prices. A mix of sentiment and fundamentals. Salvino should have taken the ATOS deal (reality is they walked) and the current protracted preliminary discussions are a signal in of themselves. BTW Acccenture has gone up 6.5% YTD.... DXC down 27%. Accenture up 1.2% MTD, DXC down 0.42%. Good luck on your investing.... gonna need it.
... and none of the dufusses here understand neither math nor technology.
Either way this is all besides the point if DXC keeps selling assets for above book value. Stabilizes the revenue and keeps buying back shares then DXC will go up. Its really just a matter of math.
Re:2cov+1kZhInuy
A good managment is part of Buffetts modern investment strategy. When he was investing in net-nets the managment teams where often garbage. The company was just so statistically cheap that it really didn't matter.
D-mb investor. Buffets selection citeria includes a great management team. Or he would put one in. Many stay at DXC because there is value but it needs the right leadership. We all believed salvi no was the person to do this but turns out he is no better, arguably worse, than his predecessor. Salvino has said all the right things but just executed on cuts, asset sales, abused the workforce and now has gone to ground. All while lining his own pocket.
Re:2vxp+1kZhInuy
What your describing is speculation not investing.
I bought DXC shares at $9 in March 2020, and cashed out 7 months later at $20 per share and I know fu-k all about stocks and finances. This stuff isn't difficult; a 12 year old could figure this out. Buy when it's low, sell when it's high. Media articles (or execs) ill attempts to manipulate stock gets you brainwashed into making stupid decisions that'll cost you money, but is a profit for others.
Re: 2drg+1kZhInuy
You're basically making the argument that I shouldn't buy something because its gone down for an extended period of time. By you're logic then I should've chased Carvana or Peleton as they where on a meteoric rise in 2020. Just because they where going up. I'm invested in DXC precisely because it's hated. While some pessimism is warranted here given the history the market is treating DXC like its going bankrubt and that's just not true at all. Like I've said multiple times on this post DXC's organic revenue appears to be bottoming. That's what the numbers and data show and quite frankly it's more reliable than an anonymous users on the layoff.com who don't even know how to read a cash flow statement. Even so if you all turn out to be right and DXCs revenue continues to fall (Something I readly admit is possible) I'll throw in the towel around book value (about $21 a share my average is $27-28) DXC a profitable company generating positive free cash flow is at the very least worth that. A horrible company does not necessarily make for a bad investment Just Google cigar bu-t investing Warren Buffett built a fortune on horrible companies no one wanted to own. Many of which like DXC had stagnant stock prices for years.
despite some of the vaguely positive comments from people in this stream who say they have stock, cannot see why, when DXC share price was approx $34 when Mr Shouty was appointed and its now $29 - absolutely no progress in 3.5 years and thats despite several billion spent in share buybacks and an offer valuing the company at 150% of its current value being declined 2 years ago
While if you really wanted to invest in the IT services asset class, Accenture has gone from $198 to $289 in same timeframe
Will not go to zero - bigger and better organisations have disappeared. There isn't much at DXC apart from people and some legacy platforms and contracts. The people are p*ssed and leaving, no credible people are joining and time is running out on all that old stuff. Only a matter of time before the whole 9 yards comes tumbling down.
Sold my DXC at $87 when revenue was above $20B. Wake me up when revenue shrinks to $10B so I have a good laugh.
Re:1ysx+1kZhInuy
I'm doing my own research thats why I'm here in the first place. DXC is barely above book value and is profitable. That gives you some pretty decent protection to the downside even if revenue continues to fall. That said revenue is bottoming the organic revenue result pretty much shows that. Even if I'm wrong this thing isn't going to 0.
DXCs stock’s ratio of 8.76x is currently well-below the industry average of 29.38x, If you are stupid this makes it look like good value so buy it. Bu, if you are smart you can see that the market think it's going nowhere. The revenue forecasts aren't based on anything substantive. Why will successive quarters of revenue shrinkage suddenly reverse? Margins may increase as costs are cut but without growing or maintaining revenues it's only heading south. Maybe it might stabilize and be one of those stocks that looks more like a bond but I doubt it.
But do your own research.
DXC has been involved in the Danish Government for a long time. This isn't new business as such. DXC has a history with Danish CPR (Social Security Number) including a massive data breach in 2020. Good on DXC for underbidding ATOS but nothing to see here.
Same story for Italy. EDS (DXC's predecessor) once had a strong reputation for government supply. Legend has it that the tech company OCP in Robocop was EDS. Now, lots of legacy contracts and systems. Now they are trying to move to partner platforms like Dynamics and ServiceNow (see recent Nordic acquisitions and announcements). Like the Lloyds deals, allegedly, there's a lot of promises around modernizing that should have been done as part of the service. DXC generally charge for perfective maintenance or don't do it. Perfective maintenance is the continuous improvement of services over time to produce economies that either reduce cost or increase value add at a constant price. The DXC model, tends to be this is a cost plus exercise or not done at all. At best its a move to cloud (to leverage the deal it had with DXC to move workload out of its data centres - no pass through to customer). Its hard to execute continuous improvement when you cut (good) delivery staff to meet cost saving targets. And that's part of DXC's demise - it cuts the wrong people. DXC is still a reasonable sales machine (see the book to bill for how inflated the pipeline is) but delivery is weak and service poor. They have cost optimized delivery at the expense of customer service /value add. They are now a commodity player. And the "Indian pure plays" are better and cheaper at that game. Platform-x was an attempt to automate the commodity service play. Platform-x is pretty much proven third party tech like ServiceNow and Dynatrace cobbled together with scripting that is hard to replicate/productize. Will wait till it all goes south and use it for my doctoral thesis.
Sorry for got to include my tag that was my question below.
I'm curious what you think of the 3 govenment deals DXC announced in EMEA. With the Danish and Italian goverments. Those where dropped by ATOS right? Or are they just contract renewals?
Re: 1tjw+1kZhInuy
I appreciate your candide feedback thank you for the information.
Not offering advice just some insights on insurance and financial services. The BPO operations for insurance are ok, cash-cows but are not core and likely to be spun out/sold. They also are largely closed book so shrinking. And there are players like resolution who are picking up these books. Rumour has it that the old head of insurance was given the boot because he couldn't or wouldn't find a buyer. Like so many at DXC disappeared without a trace. Also the BPO is run on an oily rage and as a result had information security breach. Lots of captive clients on the tech platform side due to large legacy products like life/400, Integral and SICS plus all the others in the mid-tier. They tried and failed to modernise their major offerings. They were converted from one dead programming language to another and wrapped with stuff from AWS but not sure if anyone bought it. A lot of their software as a service is just a managed service hosted in the cloud. DXC Reinsurance is just SICS. They dumped all the CTO's including the Insurance one a couple of years back and they aren't putting money (unless a client supplies it) into product. Rumour also has it that Lloyds were going to give them the boot after years of milking them. And they got shown the door in London by some of the larger insurers. Banking isn't much better - living of legacy products like Hogan (40 years old) and old service contracts. Migration to a modern platform is hard and every time someone fails, the DXC team cheer as they know its another five years of income. Some of the DXC presence in financial services has shrunk to just commodity services like laptop supply. I don't think DXC even do security monitoring any more. DXC bough luxoft but this is now an embarrassment compared to what it was. They are trying to build factories of workers for leading products like T24 in places like Egypt! But no traction with the new kids in town (Mambu, ThoughtMachine). Some of the larger banks and insurers still have significant business with DXC. One I think keeps about 3-400 DXC staff employed in India. But DXC isn't winning the new business and is seen as a dinosaur. The NPS figures aren't reliable as they reflect personal relationships and even deals cut to get good numbers. The analysts covering DXC don't really dig deep and I hazard they've never spoken to actual customers (not the C-level) who are at the coal face. Its a shame as DXC had great heritage and potential. Good luck with the investing but I wouldn't bank (excuse the pun) as the verticals aren't well regarded even internally - like Healthcare, they were considered as strategic options, as was modern workplace. Good luck with your investments.
Im not a employee of DXC just an amature investor. I am well aware of DXC's reputation but I've spoken to customers in the finacial services/insurance industry and believe or not the reputation appears to be improving. I own the stock at $27 for about a year now. These last 3 quaters appear to show that DXC's revenue is bottoming out after years of declines. If they actually do manage to grow revenue by 1% in the next fiscal year and keep free cash flow around what it is now (10% of market cap) then the stock will preform well its really just a matter of math honestly.
D-mb Investor - at what price do you buy in? There was a point where the market overreacted and the shared were sub $20 but the price hasn't shifted for years and the market isn't pricing in any real growth. The analyst consensus is "hold" which is a soft sell. As an aside the likes of DB have been pumping DXC since it was $90!
Mikey Mk2 took over with a share price around the $30 mark. The price hasn't moved despite asset sales or buy backs. The business is looking better but it performs dismally against the competition and is likely to do so given the way it treats staff and customer (I've been both).
DXC is like the old valve company - it expanded its margins while revenues declined. This was due to a captive customer base and the move to transistors. This all looked ok until there was no need for valves. What significant business has DXC won that's not a smaller renewal of existing business? And what happened to all the big deals that didn't land but were closing in the next quarter.
The company is worth less that what ATOS offered/walked away at. The Luxoft deal was bad but like other acquisitions it's been stripped of value by becoming a "DXC Company"
Given you hold shares, are you an exec? DXC steadfastly refuses to give staff skin in the game or reward them for their support of the "turn-around".
Its reputation and service are awful.
too many useless b-ms in this company, who do not have the brains to understand financials. if you are not happy with your pay go look outside and see if you can help yourself. nobody is holding you back. on the contrary, it may be of help if entitled people leave cause the idea is to get the labour pyramid sorted out to win in the Market. understand your anger, but you should show that in your resume and your next job interview. you will get what is destined for you. nobody can take what is yours.
I'm not advocating that people should stay at DXC on the contrary you should leave if you're not happy. But lets be realistic when discussing the finacial results. The reality is the numbers show the buisness is turning around irregardless of the people who hate working there.
DXC's D-mb Investor who cares as the CEO is a lying sack of sh-t, people first is the biggest joke at DXC.
Stock buy backs is a waste money , use that extra cash for merit increases for staff that works their bu-t off make king and exceeding goals. only to get a kick it the a-s at review time
I finally got fed up and left the company in December and I feel so much better every dam day
Re: sde+1kZhInuy
Guys net cash provided by operating activities was $600m. It's in the name "cash provided by DXC's operating activites ". The german bank sale cannot be included in this number anyway because that deal closed in January (Q4) and this earnings report was for the period ending on Dec 31st (Q3). So simply put DXC's operations generated positive cash flow. Also like I said organic revenue was flat on a quater over quater basis beggining in Q1. By the way I do own the stock.
OP is not biased. Straight out of the DXC pressentation. Organic growth -3.8%, operating cash flow (not FCF) was 30% based on asset sales and the plan is to buy $400m of shares. Historic debt pay down due to sale of health business.
Still no rises for staff. Still massive cuts to achieve FCF. So OP is probably angry.
Maybe you should put your money where your mouth is and buy shares in this turkey.
From slide deck
Generated ~$840 million in cash, including sale of German banks for ~$320 million in early January
We intend to complete the $1 billion share repurchase program that we introduced last year, by buying ~$400 million of DXC shares
Re:sni+1kZhInuy
Not trying to argue but that 12% decline is misleading because DXC has sold a number of assets in the past year including offender 360, fonds depot bank AXA Bank and more (which escapes me at the moment). So obviously revenue is going to be lower. You need to adjust revenue for the sale of these buisnesses and currency fluctuations. This is the organic revenue statistic that they talk about in the call and its a reasonable metric. Plus Its not just 1 quater of flat revenue its been this way for the past 3 quarters now. I stick to my original post.
“We continue to see our people-first strategy and our virtual-first model is resonating in the market and helping us in our recruiting efforts. .
What utter bull sh-t
https://www.crn.com/news/cloud/dxc-ceo-salvino-cost-optimization-push-will-include-sale-of-noncore-assets
re: last
sequential quarter comparisons are not that meaningful in the nature of IT services business, or a lot of other businesses due to the different nature of each quarter, especially with events like Christmas, Thanksgiving etc
Year on year (comparison to same period last year) is much more meaningful and for DXC it was another shocker (12.8% decline, even worse than analysts forecast)
Actually believe it or not revenue grew ever so slightly between Q2 and Q3.
The positive free cash flow excludes selling stuff. Revenue is basically flat on a q over q basis and revenue looks like its going to be flat to growing next year for the first time in DXC's history. They didn't do any buybacks in q2 and only a very small amount in q3. I get you're angry but it's making you baised and your not actually seeing the situation for what it is.