For the second quarter, global commercial revenues grew 10% (or 15.1% in constant currency), to $1.9 billion compared with $1.7 billion a year ago. This global commercial growth is a reflection of the recent business awards announced over the past few quarters. Contributing to this performance was a 12.3% increase in U.S. commercial revenue to $1 billion from last year’s $890.1 million as well as other international revenue, excluding Europe, which rose a robust 50.9% (or 59.8% in constant currency) to $294.9 million compared to $195.4 million in last year’s second quarter. CSC Australia’s revenue gain continued to be aided by recent outsourcing awards from General Electric/GE Capital and Broken Hill Proprietary Company Limited, and CSC’s acquisition of their respective IT services business units.
Revenue from Europe was $583.1 million (up 5% in constant currency), down from $621.5 million reported in last year’s second quarter. Revenue in Europe was adversely impacted by lower overall demand for consulting and systems integration services and specifically the continuing slower pace of Enterprise Resource Planning implementation activities.
Second quarter revenue derived from the U.S. federal government increased a healthy 18.3% to $620.9 million from last year’s $525 million. Both civil agency and Department of Defense (DoD) related revenues reflect solid growth comparisons to last year’s quarter. CSC’s civil agency business climbed 38.3% to $255.2 million, up from $184.5 million last year, with major contributions from the IRS modernization engagement, GSA related work and additional ramping-up of revenue from other new and existing contracts. DoD revenue rose to $365.7 million, up 7.4% from last year’s $340.5 million, aided by the Army LOGMOD contract and increased revenue flow from other new and ongoing engagements.
CSC’s robust federal market pipeline of opportunities at September 29 was approximately $22 billion over the next 30 months, added Honeycutt. We are pleased with the growing federal IT services market, which is looking more and more to commercial best practices in its modernization activities. We view the potential transitioning of federal employees to the private sector as a major opportunity for CSC in the future. The key drivers of future federal growth play to the strengths of CSC as a tier-one provider of outsourcing services to both the commercial and federal markets.
