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Sales slip at fine-hit CSC after firm escapes from the NHS
$190m fine over beancounting smacks the bottom line
Sales at US computer giant CSC dropped 8.7 per cent to $2.95bn (£1.9bn) for its third quarter - around $150m (£98.6m) below what the company had hoped.
The company also recorded an income loss of $313m (£206m) for the third quarter, which was affected by pre-tax pension-related charges of $462m (£303m) and a $195m (£128m) charge for a proposed SEC settlement and related expenses.
The fine resulted from a probe into the firm's accounting practice revenue, including the reporting of revenue from its troubled NHS contract negotiations between 2009-2012.
Mike Lawrie, chief executive of CSC, said the settlement has brought the investigation into a close and will allow the company "to focus even more attention on strategy."
In a conference call, Lawrie said the shortfall in sales was due to a failure to secure all the work it had expected to win in the quarter.
"We did not execute as well as we needed in the quarter in selling new work and generating the revenue we had anticipated," he said.
Revenue was down across the company's divisions, except its North American Public Sector business, which rose 0.8 per cent to $998m (£656m) compared with last year.
The company has been desperately cutting overheads in a bid to improve margins, which rose 0.8 percentage points to 11.3 per cent in the quarter.
Lawrie said the company was seeing "significant" growth in its "next generation offerings" such as commercial cloud and big data. "However, these contributions are not yet large enough to offset headwinds in our traditional commercial business," he said in a statement.
CSC has approximately 72,000 employees and reported revenue of $12.6bn in its last full-year. ®