Werent that bad making $650 free cash after everything is paid, even reduced the debt by $300 million, and a massive $250 million buyback thats 30% of the company. Its a really cash generative business on the back of under paying employees.
What Wall Street doesnt like is the constant revenue decline and more forecast, and Rwul keeps on promising AI solutions in place but its not showing in revenue. Wall Street doesn't do contraction even though DXC is making a ton of money.
@t2 It works if there is a goal which results in a bonus and a pay rise. If people believe the same lies and despite all the hard effort it's a round of 0s again then it will soon fail. The co. basically needs to pay the bonus up front and contractually withdraw it for those who don't contribute. But can't see that happening. I hear it's a farce account like most?
@bv
One simple answer: Met Police. They’ve now asked DXC to take over many of the operations that the incumbent is reluctantly hanging onto so the team on that account have rebuilt a level of confidence in what DXC can do.
@f9 There are very few serious large scale DXC customers left that would risk their operational stability by relying on this company. And for those that do, you can be sure they are negotiating extremely favorable terms compared to prevailing market rates along with extensive contractual protections in the event of a systemic failure on DXC’s part.
@dz There is no reason to own this stock. Recommending it is terrible investment advice. The core business does not generate positive income and the reported cash flow is accounting smoke and mirrors than sustainable performance. The company has very little cash inflow left that could materially support short term liquidity, especially when balanced against the debt it continually needs to refinance and roll over at high interest rates. That balance is becoming increasingly fragile and it looks close to breaking.
@ew bae are keeping us hanging on for no apparent reason. Other than a failing over complicated data center that nobody else will touch. They have pretty much replaced all we do with other suppliers. But are still keeping people as insurance incase the endless documentation they want isn't right. They could take it in-house at a fraction of the cost and have fixed moral with everyone on the same grade overnight. But they don't. I guess even they plan on removing DXC in the end.
@bv time to spin the UK operations of to better partners like ntt data, Microsoft, aws,etc taking the good grunts that do the work and sack the rest of all the inept dead wood managers, relight the phoenix under different logo and experience in new companies for the ex dxc UK grunts, maybe going back in house to say Bae Systems
That is spot on. The business is generating lots of cash. The valuation is cheap. Even as GIS declines it throws off cash (perhaps, because GIS declines the business throws off lots of cash). The messaging is really unfortunate. Its hyper growth messaging and there are no growth investors listening - they left years ago. The only reason to own DXC is because of its attractive FCF yield (currently over 40% of equity market cap) and buybacks (ASR - somebody please soon!!). What is unfortunate is that the Street is making fun of them to their faces, and they don't seem to realize it. One analyst today asked about AI excitement and the "AI investor day", and then turned right around 10 seconds later and asked about how AI is driving declines in the Apps business (the short thesis on DXC is that AI will reduce their revenues). It is not kind to make fun of people to their faces.
Share price is currently $8.60 - a 33% drop in a less than a week that cannot be good no matter how much Free Cash there is.
Core operations generated barely $28 million of net income for the year while Q4 alone lost $140 million. Credit to Del Bene. Few CFOs can dress up collapsing fundamentals with this much financial engineering. But gaming amortization on “intangibles” and squeezing retirees through draconian pension settlements will not save this broken business. Beneath his accounting smoke the company keeps deteriorating quarter after quarter. This business is a slow motion train wreck with a ticking time bo-b under its hood.
@bf In the UK a lot out work is delivering UK critical or strategic accounts. Anything that could be offshored was done years ago.
So I ask who's bright idea is it to use a company of totally demoralised staff who haven't had a pay rise in 10 years are trusted to do this!?
I'm not saying anyone would maliciously cause damage. But when your not paid to care you tend to stop putting in the effort you used to.
Anyone else get MBDA job adverts when looking at this page ? 😬
The results were far from OK. They did describe an organisation already in terminal decline now faces by having to pay back the debt that ironically has been keeping it afloat. All the metrics show that DXC is trading at a loss, has contracting markets, is losing its ability to execute. The new AI initiative has no named customers. It's all BS. After market trading saw the share price fall to its lowest value ever which means the market sees the issues that the analysts and AI share wizards have missed. Expect more layoffs and a lot of Govt push back because there are CNI projects that are currently looking very precarious and risk damaging national security.
Del Bean is keeping it in the bank, because all the execs have been given blank cheques and they can silently siphon off as needed.
The only consistent message quarter to quarter is revenue declining faster than forecast. The stock price falling into the single digits says everything. If you’ve listened to this company’s analyst calls long enough you know management just pivots to whatever narrative works in the moment and they’re running out of narratives faster than revenue streams. Easily the worst management team this company has ever had.
after a world-record 36th consecutive quarter (the entire 9 years of DXC's existence) of revenue decline the > 20% stock decline is in response to the 2027 forecast of even more of the same, in fact the decline is accelerating (7.5% forecast for Q1 and 5% for the whole year).
the market cap of DXC (now about $1.6B) is actually smaller than the cash ($1.7B) sitting in the bank! Of course that cash is needed for the stock buyback and the exec bonuses that will be paid in next 3 months
Looks like Rahul is gone after the next qtr if there is no earnings growth as the share price has crashed 20%.
What i don't understand is why Del Bean has $1.7billion of cash thats un used. Why doesn't he pay of $1.5 billion of debt. He needs to work much better on his cash management.