DXC Guides FY27 EPS to $2.25-$2.50 as Q2 Revenue Falls 4.0%
DXC sits 73% above its 52-week low of $7.9.
Summary
DXC beat its own Q2 expectations, but revenue still fell 4.0% to $3.03B and adjusted EBIT dropped 26.4%; FY27 guidance of $2.25-$2.50 non-GAAP EPS and ~$600M free cash flow now frames the story, alongside acknowledged talks to sell the Insurance unit.
Key Events · Earnings and Guidance · DXC
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Q2 Revenue Down 4.0% to $3.03B
Total revenue fell 4.0% year-over-year to $3.03B, with adjusted EBIT down 26.4% to $187M (6.2% margin) and non-GAAP diluted EPS down 20.2% to $0.67.
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FY27 Guidance Sets $2.25-$2.50 EPS
Full-year revenue is guided to $11.91-$11.98B (down 5.5% to 5.0% organic), with adjusted EBIT margin of 5.75%-6.25%, non-GAAP EPS of $2.25-$2.50 and free cash flow of ~$600M; Q3 EPS is guided to only ~$0.55.
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Bookings Fall 10% to $2.4B
Q2 bookings of $2.4B declined 10% year-over-year for a 0.80x book-to-bill; GIS bookings fell 12.7% and CES bookings fell 17.0%, leaving the trailing-twelve-month book-to-bill at 1.0x.
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Insurance Unit Sale Talks Acknowledged
DXC acknowledges ongoing discussions regarding a possible sale of its insurance business — the segment grew revenue 23.1% to $394M and profit 60.7% to $45M, following the October 19 Reuters report of advanced talks with Eldridge Industries.
Analysis · DXC · Technology
DXC's Q2 beat its own expectations on revenue, adjusted EBIT and non-GAAP EPS, yet the underlying trend remains contraction: revenue fell 4.0% to $3.03B, adjusted EBIT dropped 26.4% to $187M and non-GAAP EPS fell 20.2% to $0.67. The forward view matters more. Management guided FY27 revenue to $11.91-$11.98B (down 5.5% to 5.0% organic) with non-GAAP EPS of $2.25-$2.50, and Q3 EPS of only ~$0.55, implying the back half carries the weight. Bookings of $2.4B fell 10% with a 0.80x book-to-bill, so the revenue recovery the CEO says will 'take time' is not yet visible in the order book. Insurance is the one bright spot, up 23.1% to $394M with profit up 60.7% — the same unit Reuters reported on October 19 is in advanced talks to be sold to Eldridge Industries, and the company now explicitly acknowledges those discussions. A sale would remove the fastest-growing segment and its profit, so the guidance and the divestiture talks have to be read together.
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At the time of this filing, DXC was trading at $13.68 on NYSE in the Technology sector, with a market capitalization of approximately $2.4B. The 52-week trading range was $7.90 to $16.38. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.