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Yahoo
12 hours ago
- Yahoo
DXC (NYSE:DXC) Posts Better-Than-Expected Sales In Q2, Full-Year Sales Guidance is Optimistic
IT services provider DXC Technology (NYSE:DXC) reported Q2 CY2025 results beating Wall Street's revenue expectations , but sales fell by 2.4% year on year to $3.16 billion. Guidance for next quarter's revenue was optimistic at $3.17 billion at the midpoint, 2% above analysts' estimates. Its non-GAAP profit of $0.68 per share was 9.9% above analysts' consensus estimates. Is now the time to buy DXC? Find out in our full research report. DXC (DXC) Q2 CY2025 Highlights: Revenue: $3.16 billion vs analyst estimates of $3.08 billion (2.4% year-on-year decline, 2.4% beat) Adjusted EPS: $0.68 vs analyst estimates of $0.62 (9.9% beat) The company lifted its revenue guidance for the full year to $12.74 billion at the midpoint from $12.31 billion, a 3.5% increase Management raised its full-year Adjusted EPS guidance to $3.10 at the midpoint, a 3.3% increase Free Cash Flow Margin: 4.5%, up from 1.4% in the same quarter last year Organic Revenue fell 4.3% year on year, in line with the same quarter last year Market Capitalization: $2.47 billion Company Overview Born from the 2017 merger of Computer Sciences Corporation and HP Enterprise's services business, DXC Technology (NYSE:DXC) is a global IT services company that helps businesses transform their technology infrastructure, applications, and operations. Revenue Growth Reviewing a company's long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. With $12.79 billion in revenue over the past 12 months, DXC is larger than most business services companies and benefits from economies of scale, enabling it to gain more leverage on its fixed costs than smaller competitors. This also gives it the flexibility to offer lower prices. However, its scale is a double-edged sword because finding new avenues for growth becomes difficult when you already have a substantial market presence. To expand meaningfully, DXC likely needs to tweak its prices, innovate with new offerings, or enter new markets. As you can see below, DXC's demand was weak over the last five years. Its sales fell by 7.8% annually, a tough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. DXC's annualized revenue declines of 5% over the last two years suggest its demand continued shrinking. We can dig further into the company's sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don't accurately reflect its fundamentals. Over the last two years, DXC's organic revenue averaged 4.5% year-on-year declines. Because this number aligns with its two-year revenue growth, we can see the company's core operations (not acquisitions and divestitures) drove most of its results. This quarter, DXC's revenue fell by 2.4% year on year to $3.16 billion but beat Wall Street's estimates by 2.4%. Company management is currently guiding for a 2.3% year-on-year decline in sales next quarter. Looking further ahead, sell-side analysts expect revenue to decline by 3.8% over the next 12 months, similar to its two-year rate. Although this projection is better than its two-year trend, it's hard to get excited about a company that is struggling with demand. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Operating Margin Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. DXC was profitable over the last five years but held back by its large cost base. Its average operating margin of 2.5% was weak for a business services business. On the plus side, DXC's operating margin rose by 8 percentage points over the last five years. in line with the same quarter last year. This indicates the company's overall cost structure has been relatively stable. Earnings Per Share We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Sadly for DXC, its EPS and revenue declined by 3.6% and 7.8% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, DXC's low margin of safety could leave its stock price susceptible to large downswings. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For DXC, EPS didn't budge over the last two years, but at least that was better than its five-year trend. We hope its earnings can grow in the coming years. In Q2, DXC reported adjusted EPS at $0.68, down from $0.74 in the same quarter last year. Despite falling year on year, this print beat analysts' estimates by 9.9%. Over the next 12 months, Wall Street expects DXC's full-year EPS of $3.37 to shrink by 8.7%. Key Takeaways from DXC's Q2 Results It was great to see DXC raise its full-year revenue and EPS guidance. We were also glad this quarter's revenue and EPS outperformed Wall Street's estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 2% to $13.90 immediately after reporting. DXC may have had a good quarter, but does that mean you should invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free.
Business Insider
12 hours ago
- Business Insider
'Double Disaster': Boeing Stock (NYSE:BA) Slips On Strike Threat, Trouble for the F-47
Just when you think things might be going well for aerospace stock Boeing (BA), along comes the kind of thing that makes you convinced Boeing is trying to snatch defeat from the jaws of victory. A growing problem for the F-47, and the very real potential of a new strike as early as Monday, are hitting Boeing hard. Investors are reconsidering, and shares dropped nearly 2% in Thursday afternoon's trading. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. New reports suggest that the engine for the F-47 might be a while in coming. In this case, a 'while' means 'up to two years.' That alone is bad news enough for the project, because if the engine is tardy by a whopping two years, then it becomes entirely possible the whole project will be delayed until after the second Trump administration concludes. The engine was supposed to be ready in the fourth quarter of 2027. That is still a substantial time off, but now, the engine will not arrive until the second quarter of fiscal 2030. A report from Breaking Defense noted, 'Considering the aggressive timeline the Pentagon is pushing to fly the F-47 before the end of President Donald Trump's term, a next-gen engine is likely out of reach for the fighter in the near future.' But that was just the start of the F-47's problems, as another one is likely to rear its ugly head as early as Monday. The other is brewing as we speak in St. Louis, though it should be resolved well before the engine arrives. (Another) Strike Incoming Workers at three different Boeing plants in and around St. Louis may go on strike as early as Monday. Boeing made one more attempt to establish a new contract with the International Machinists and Aerospace Workers union, but that contract was pretty soundly rejected at last report. That set up the union for a week-long 'cooling-off period' that will cool off absolutely no one, and a strike is set to follow from there. So why did the union pass on the latest contracts? Reports note that the issue was not that the St. Louis plant would have received far smaller raises than their Everett equivalents under the new contract, but rather, the biggest issue is a matter of work schedules. Under the new agreement, Boeing would have been allowed to move workers from eight-hour shifts over five days to 10-hour shifts over four days. Some employees would even have been obliged to take on 12-hour shifts, but over three days. Is Boeing a Good Stock to Buy Right Now? Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 18 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 26.66% rally in its share price over the past year, the average BA price target of $256.68 per share implies 15.64% upside potential.
Business Insider
12 hours ago
- Business Insider
First Solar (FSLR) Gets a Buy from Roth MKM
Roth MKM analyst Philip Shen reiterated a Buy rating on First Solar yesterday and set a price target of $225.00. The company's shares closed yesterday at $174.73. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Shen covers the Technology sector, focusing on stocks such as First Solar, Array Technologies, and NEXTracker, Inc. Class A. According to TipRanks, Shen has an average return of 5.1% and a 39.57% success rate on recommended stocks. The word on The Street in general, suggests a Strong Buy analyst consensus rating for First Solar with a $210.11 average price target, implying a 20.25% upside from current levels. In a report released yesterday, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $204.00 price target.
