Mr DeepDive had the DXC CEO squirming... "We delivered two quarters of rev stabilisation.. " - really? Some might call falling revenue 'unstable'... That response to questions on evidence of improvement that gave the Board confidence to turn down the 'premium' Atos offer! Nobody in the room could of swallowed that? Reading the 'waffle' in the transcript is more painful.
5 replies (most recent on top)
You do know that sarcasm is a thing
You do know DXC is a publicly traded company right?
The board don't own DXC, they have a few shares but it amounts to 0.74% of the total amount issued.
I used to imagine I worked with some of the brightest people out there, these days I tend to question that concept.
It was just simple math, for $10B – there are 10 board members and they felt that if they are each only getting $1B it did not amount to a hill of beans for any of them.
I guess someone had to ask but what he was really trying to draw out was what exactly went down with atos.
He wanted to know what dxc showed atos that made them drop the mic.
I don't think he thought he'd get a straight answer but fair enough for asking.
Don't suppose he'll get an invite again.
yes the earnings call transcript does make interesting reading. Highlighting revenue "stabilization" when it dropped 14.6% (approx $750M) over same quarter last year. They did beat revenue estimates by $88M but then admitted there was a $118M boost to revenues from currency tailwinds.
Focusing on sequential quarter measures (ie comparing Q3 to Q2 in same year rather than Q3 in previous years) is largely meaningless given the cyclical nature of multi-year service contracts. DXC is not Apple trying to push consumer products out every day.
When pushed on when revenue might actually "rise" rather than "stabilize" there was no convincing answer, so I guess DXC is targeting on being a $15-16B a year revenue company and "stable". Same set of unconvincing answers on the ATOS sale falling through, clearly DXC felt company was valued so much higher than what ATOS thought that ATOS simply walked away rather than negotiate a higher buy price. DXC market cap is about $6.5B, ATOS offered $10B. So if the share price doesn't reach about $40 in the next few months to reach ATOS valuation + premium, there will be a lot of unhappy shareholders.