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CSC Secures More Federal Deals

Zacks Equity Research

Computer Sciences Corporation (CSC) has secured a number of deals to strengthen the defense infrastructure of the country. The company has been awarded a deal by the U.S. Department of Homeland Security’s (DHS) Customs and Border Protection (CBPI) department to support its enterprise network engineering services. These services include components such as cyber security, cloud as well as big data.

This contract has a one-year base period and four one-year options, with an estimated maximum value of $85.0 million. CBP is consolidating the agency’s networks to modernize and improve its operational efficiencies and security services. CSC will help CBP strengthen its cyber security capabilities.

Computer Sciences has also received a $41.1 million deal from the U.S. Department of Defense (DOD). Per the deal, CSC will supply information technology support services to the DOD’s Naval Education and Training Professional Development and Technology Center till 2015.

As per the technology research firm, Gartner Inc. (IT), IT spending is expected to drop 0.1% this year to $449.5 million. Even though this has not affected CSC’s business much, it does seem to indicate sluggishness in its number one served market.

Gartner had earlier projected 0.2% increase for the year, which is now being lowered because government agencies continue to face economic challenges. On the positive side, Gartner states that cloud computing continues to draw more business from operational capital expenditure. Gartner also believes that the main priorities will be mobile technologies, IT modernization and cloud computing.

Computer Sciences has its work cut out, given the increasing competition from BMC Inc. (BMC), as well as challenging macroeconomic conditions in Europe. In addition to this, a delayed order renewal process of the Federal government might make things difficult for the company, going ahead.

Computer Sciences holds a Zacks Rank #3 (Hold).

Investors can also consider SanDisk Corp (SNDK), which carries a Zacks Rank #1 (Strong Buy).

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