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Computer Sciences: Another Earnings Day, Another Giant Move

The Exchange

When Computer Sciences (CSC) reports earnings, outsized moves in the share price are becoming the norm.

Including Tuesday, seven of the last eight times CSC has posted its quarterly numbers, that's led to a double-digit move in the stock of the computer services and consulting company. This time, CSC was having one of the biggest single-session upward moves in nearly three decades and setting a 52-week high. That came after it beat earnings estimates and raised its outlook for the fiscal year.

Shares of CSC were recently up 15.5% at $36.34. The stock's 52-week range was $22.19 to $34.74 before the current trading day.

The Falls Church, Va., company reported second-quarter earnings of 83 cents a share, reversing a loss in the year-earlier period that was heavily impacted by a charge. Revenue was $3.85 billion, down from $3.97 billion in the 2011 quarter. This year's profit included a 25-cent-a-share charge, and analysts were calling for 48 cents, according to FactSet. For fiscal 2013, CSC is now expecting to earn $2.30 to $2.50 a share, a higher projection than it offered in August when it forecast $2.10 to $2.30.

As noted above, significant changes in CSC's stock price on earnings days is looking more and more like a habit. However, as shown by the chart below, that's not necessarily to the upside. Here's what's happened around earnings going back two years:

Computer Sciences Stock Price

Two of the top three up days CSC has ever had -- using FactSet data that go back to 1984 -- have been after quarterly reports in 2012. The strongest showing followed the third fiscal quarter of 2012, reported in February, and the No. 3 best came after the first fiscal quarter of 2013, reported in August.

Of CSC's 10 biggest single-day losses, three of those also are represented in the chart -- the third quarter of fiscal 2011, the fourth quarter of fiscal 2011 and the second quarter of fiscal 2012.