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DXC Technology Beats Q4 Estimates but Faces Sharp Decline Amid Weak FY25 Outlook
May 17, 2024 8:45 AM - Parth Sanghvi
Image credit: Gilly
DXC Technology (NYSE: DXC), a leading provider of global technology services, has reported fourth-quarter earnings that surpassed analyst estimates. Despite this positive news, shares fell sharply as the company provided a weaker-than-expected outlook for fiscal year 2025.
Key Highlights:
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Fourth-Quarter Performance:
- Earnings Beat: DXC Technology reported adjusted earnings per share (EPS) of $0.97, beating the consensus estimate of $0.83 by $0.14.
- Revenue: The company achieved revenue of $3.39 billion for the quarter, slightly above the consensus estimate of $3.37 billion. However, this marked a 5.7% decline from the same quarter last year.
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Fiscal Year 2025 Outlook:
- Q1 Guidance: For the first quarter of FY25, DXC forecasts EPS between $0.55 and $0.60, falling short of the analyst consensus of $0.76. Revenue for Q1 2025 is expected to be between $3.1 billion and $3.15 billion, surpassing the consensus estimate of $3.02 billion.
- Full-Year Guidance: The company anticipates full-year FY25 EPS to range from $2.50 to $3.00, significantly lower than the consensus estimate of $3.30. Revenue guidance for FY25 is projected to be between $12.67 billion and $12.95 billion, below the consensus estimate of $13.65 billion.
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Market Reaction:
- Following the earnings release and guidance announcement, DXC Technology's stock plunged nearly 19%. This sharp decline is attributed to the company's FY25 guidance, which is lower than what analysts had expected.
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CEO's Statement:
- Raul Fernandez, Chief Executive Officer of DXC Technology, commented on the results, stating, "My first months as CEO have strengthened my view of the incredible talent of our employees and the value we bring to our customers every day." He expressed confidence in the company's future despite the current challenges.
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