Leading information technology (IT) company Computer Science Corporation (CSC) has won another major contract. The IT major recently disclosed that it is one among the two chosen companies to be awarded the Visa Services indefinite-delivery/indefinite-quantity (IDIQ) contract by the Department of State (DoS) Bureau of Consular Affairs its.
As per the agreement, CSC will provide a range of visa-related business process support services, local stand-alone facilities, and oversight and management of visa-support services for U.S. embassies and consulates abroad. The contract was awarded for an initial period of 1 year, with an option to extend it up to another 9 years, bearing an estimated value of $2.8 billion over 10 years.
Recently, the company grabbed a deal with the Department of Veterans Affairs. As per this contract, CSC will be providing healthcare claims processing system and services. Although the pecuniary details of the contact is not mentioned, but it has the option of extending upto 4 years, and will result in major cost saving for the department.
This apart, the U.S. Army Material Command extended its contract for another two years, so the technology major will continue providing information technology and logistics services under the Army’s Logistics Modernization Program (LMP). The extension came for a monetary consideration of $261 million.
So aggressive marketing, high quality of technology enabled solutions and greater customer satisfaction is helping the company win mega deals.
The company reported decent third quarter EPS of $1.36, which exceeded the Zacks Consensus Estimate of $1.23 and provided a positive outlook for fiscal year 2010. The company has been growing through acquisitions that have enhanced its services portfolio and expanded its operations into new markets. It has a steady flow of new business, especially in the government vertical and is financially sound. On the other hand, we are a bit concerned about the intense competition that the company faces in the IT and cloud computing space from both big and small players such as Accenture (ACN) and Hewlett-Packard Company (HPQ).
We maintain a Neutral rating on the stock.
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