If you are still curious, need more insight, as to where the company is going, listen to the earnings call today, November 3, 5:00PM (EST). It should be clear as day what the focus is now and in the future. If the analysts are not on a leash, the post report call may have a gem or two reveal themselves. Not only in how Mike and Paul answer the questions but also what they avoid in their answers.
4 replies (most recent on top)
Some additional humorous detail regarding the Earnings Call.
http://cassandra-guidedinsights.blogspot.com/#!/2016/11/csc-q2-fy2017-results-it-doesnt-matter.html
Excerpt below ....
"In early 1959, just around the time CSC was founded, Buddy Holly made the US charts just after his death with a song called “It doesn’t matter anymore”. The title of this song seems to describe well CSC’s announcement of its Q2 FY2017 results this week.
Who cares about CSC’s results any more? Nobody its seems. The share price hardly moved after the announcement, and some of the Analysts who have covered CSC for a long time either did not join the Earnings Call or were represented by a stand-in. Those who were there each asked a question to denote their attendance and Messrs Lawrie and Saleh went through the motions of answering without too much excitement or enthusiasm.
EPS was slightly above expectations, on a non-GAAP basis as always. Revenue showed year-on-year growth, but this seems to be due to the impact of the inclusion of UXC and XChanging.
Mike Lawrie re-iterated the growth in next-generation offerings, talked about a new go-to-market alliance with PwC, and said that low cost centers now accounted for 50% -55% of the workforce, expected to grow to 65%-75% in the next couple of years. He also mentioned that after moving resources from higher cost to low cost centers the next step would be to remove them completely via automation.
The Analysts asked a few innocuous questions and the event was over. Not surprising. The only thing of any importance for Messrs Lawrie and Saleh today is ensuring that there are no bad surprises which could jeopardize the merger with HP Enterprise Services, or cause the pricing or its balance to be brought into question. (The current plan is that the “NewCo” , (Everett SpinOff) will be owned 50.1% by former shareholders of HP Enterprise Services and 49.9% by CSC shareholders). So far they are doing a good job in that regard and they do not expect any SEC regulatory issues with the merger.
And the futures of the CSC employees in all this? Who knows! But as they reflect on their options for the future, they may find the last verse of that Buddy Holly song to be pertinent:
"Well, you go your way and I'll go mine, Now and forever till the end of time, I'll find somebody new, and baby, we'll say we're through, And you won't matter anymore".
Related to labor cost, CSC stated they have moved 1500 positions from high costs areas.
At the low cost areas, the proposed intent is to invest in automation so as to reduce the amount of labor, even in low cost areas.
Year over year they have gone from 25% to 50% US to Off-Shore/Near-Shore mix. The intent is to increase that number over the next few years.
They talked about a "Labor Pyramid" and the strategy of moving people in at the lower end of the pyramid.
It is about money and doing all they can to reduce labor cost. Should be no surprise.
They seperated the reporting along the GBS and GIS business units. GBS looked good, GIS not so much.
https://finance.yahoo.com/news/csc-host-conference-call-regarding-205700787.html
Can you post the call info for that?