The golden decade is over, and all outsourcers who have heavy investments in the public sector business are going to be troubled. Of course, we all know how well the private side of CSC and others is going ... all those success stories keep flooding out don't they?
Actually the defense contracts are a moot point. CSC is well positioned in the cloud computing consortium as well as other relatively new or emboldened revenue streams. Which I'm not a regular or would know if it has been discussed before. They will benefit greatly from it. With the downturn in the economy leasing has skyrocketed and will reach the billion range fairly soon. Management has an ear to the ground and will remain profitable. I for one have reentered a position with csc at the fire sale panic pricing and highly anticipate the easy 30 per cent gain in the fairly near term future.
Management has ears to the ground? Read some of the other posts here before you make statements like that. Management has driven CSC INTO the ground. And do not think "the cloug" is this wonderful thing. As a computer consultant, I despise it!!! Full of security holes and it is a snake oil scheme.
Latest slides at CSC conference call showed only 27 percent of CSC's business comes from defense. CSC management stated that they see BSS as the "growth engine" (I don't agree that BSS is a growth engine. Double digit returns just indicate how beaten down BSS has been).
At last quarter's conference call CSC management stated that restructuring was being driven in anticipation of cuts in defense.
Additionally, when president Obama announced (and even before) U. S. withdrawal from Iraq, defense contractors were commencing a restructuring and announcing layoffs.
Some, like Harris (HRS), are probably going to be bought out (may be even Unisys (UIS) --- finally!), Raytheon (RTN), SAIC (SAI). And some will go out of business, like GTSI (GTSI).
Other defense contractors are well positioned Boeing (BA), Lockheed Martin (LMT), Northrop Grumman (NOC), General Dynamics (GD), United Technologies (UTX), General Electric (GE) have diversified as best they can and will survive and thrive.
It isn't like they haven't been through this before.
One again the maxim "When you read it in the newspapers it is too late" is proven correct again.