DXC Technology (NYSE:DXC) Posts Earnings Results, Misses Expectations By $0.02 EPS

DXC Technology (NYSE:DXC) issued its earnings results on Thursday. The company reported $0.40 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.42 by ($0.02), FiscalAI reports. DXC Technology had a net margin of 0.14% and a return on equity of 17.24%. The company had revenue of $3 billion during the quarter, compared to analysts’ expectations of $2.99 billion. During the same quarter in the previous year, the company earned $0.68 earnings per share. The firm’s quarterly revenue was down 5.0% compared to the same quarter last year. DXC Technology updated its Q2 2027 guidance to 0.550-0.550 EPS.

Here are the key takeaways from DXC Technology’s conference call:

• Revenue declined 6.7% year over year to $3.0 billion in Q1, while adjusted EBIT margin fell 180 basis points to 5%. Management expects Q2 revenue to decline 5.5%-6.5% and fiscal 2027 organic revenue to decline 3%-5%.
• Bookings increased 5% overall, with GIS bookings up 35% and a 1.11 book-to-bill ratio, supported by several large new-logo and renewal wins. DXC said DXC OASIS was deployed across 57 customer environments and expects 125 customer deployments by fiscal year-end.
• The company’s expected second-half improvement depends heavily on GIS, with roughly 90% of the projected recovery coming from that segment. Management has substantial visibility from opening backlog but still requires modest in-year sales improvement and assumes no macroeconomic improvement.
• DXC reported early evidence that its agentic AI offerings are shortening customer sales cycles and improving operational results, including reducing intrusion-detection time in its own security operations from about 21 minutes to six seconds. It also cited a multi-year, multi-million-dollar Agentic SOC contract and 86 newly trained forward-deployed engineers.
• Free cash flow was $314 million, including a $214 million benefit from the TCS litigation settlement; excluding that benefit, free cash flow was $100 million, modestly above the prior year. Net debt declined by approximately $270 million quarter over quarter, and DXC plans to retire $400 million of bonds and repurchase about $250 million of shares during the fiscal year.

DXC Technology Stock Up 2.0%

Shares of NYSE:DXC traded up $0.22 during midday trading on Friday, hitting $11.46. 3,742,071 shares of the company’s stock traded hands, compared to its average volume of 3,913,827. The firm’s fifty day moving average price is $9.40 and its two-hundred day moving average price is $11.44. The company has a debt-to-equity ratio of 0.94, a quick ratio of 1.36 and a current ratio of 1.36. DXC Technology has a twelve month low of $7.90 and a twelve month high of $15.68. The company has a market cap of $1.87 billion, a PE ratio of 191.08 and a beta of 0.82.

Key Headlines Impacting DXC Technology

Here are the key news stories impacting DXC Technology this week:

• Positive Sentiment: Free cash flow rose to $314 million in Q1 FY2027 from $97 million a year earlier, while DXC repurchased $70 million of stock. The company also raised its full-year free-cash-flow outlook to approximately $685 million, supporting the investment case. DXC Technology Reports First Quarter Fiscal Year 2027 Results
• Positive Sentiment: Quarterly bookings increased 5% year over year to $3.0 billion, with a 0.99x book-to-bill ratio. New leadership appointments and a strategic partnership with ElevenLabs also reinforce management’s effort to position DXC as an AI-focused enterprise technology provider. DXC Announces Leadership Appointments to Accelerate Its AI-Centric Future DXC and ElevenLabs Announce Strategic Partnership
• Neutral Sentiment: Some hedge funds remain bullish on DXC, suggesting valuation and turnaround potential are attracting institutional investors despite the company’s year-to-date decline. Hedge Funds Are Bullish on DXC Technology
• Negative Sentiment: Q1 FY2027 revenue fell 5.1% year over year to $3.0 billion, or 6.7% organically, while non-GAAP EPS dropped 41.2% to $0.40 and missed the $0.42 consensus estimate. Revenue exceeded expectations slightly, but the earnings decline remains a concern. DXC Technology Lags Q1 Earnings Estimates
• Negative Sentiment: Management’s Q2 FY2027 EPS outlook of $0.55 is well below analysts’ $0.71 expectation, and full-year organic revenue is expected to decline 3%–5%. The guidance highlights continued pressure on the legacy business and limits the immediate upside from the AI strategy. DXC Expects FY2027 Organic Revenue to Decline

Insider Buying and Selling

In related news, CEO Raul J. Fernandez acquired 28,051 shares of DXC Technology stock in a transaction on Monday, May 11th. The shares were bought at an average price of $8.90 per share, for a total transaction of $249,653.90. Following the completion of the purchase, the chief executive officer directly owned 844,052 shares in the company, valued at $7,512,062.80. This trade represents a 3.44% increase in their position. The purchase was disclosed in a document filed with the SEC, which can be accessed through the SEC website. 1.13% of the stock is owned by company insiders.

Hedge Funds Weigh In On DXC Technology

A number of institutional investors and hedge funds have recently added to or reduced their stakes in DXC. Lido Advisors LLC boosted its stake in DXC Technology by 6.1% during the fourth quarter. Lido Advisors LLC now owns 17,383 shares of the company’s stock worth $241,000 after acquiring an additional 1,003 shares in the last quarter. EverSource Wealth Advisors LLC boosted its position in shares of DXC Technology by 240.6% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 1,737 shares of the company’s stock worth $27,000 after purchasing an additional 1,227 shares in the last quarter. Focus Partners Wealth boosted its position in shares of DXC Technology by 9.9% during the 3rd quarter. Focus Partners Wealth now owns 15,094 shares of the company’s stock worth $202,000 after purchasing an additional 1,357 shares in the last quarter. Amundi grew its stake in shares of DXC Technology by 5.6% in the 3rd quarter. Amundi now owns 31,566 shares of the company’s stock valued at $429,000 after buying an additional 1,684 shares during the period. Finally, Captrust Financial Advisors increased its position in DXC Technology by 14.4% in the 2nd quarter. Captrust Financial Advisors now owns 13,798 shares of the company’s stock valued at $211,000 after buying an additional 1,742 shares in the last quarter. 96.20% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

Several research firms have issued reports on DXC. Zacks Research upgraded DXC Technology from a “strong sell” rating to a “hold” rating in a research report on Monday, July 13th. Royal Bank Of Canada reiterated a “sector perform” rating and issued a $16.00 price objective on shares of DXC Technology in a research report on Friday, June 12th. BMO Capital Markets lowered their target price on shares of DXC Technology from $17.00 to $10.00 and set a “market perform” rating on the stock in a research report on Monday, May 11th. Weiss Ratings cut DXC Technology from a “sell (d+)” rating to a “sell (d)” rating in a research report on Monday, May 11th. Finally, TD Cowen lowered their target price on DXC Technology from $11.00 to $10.00 and set a “hold” rating on the stock in a report on Thursday, July 9th. Seven equities research analysts have rated the stock with a Hold rating and three have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Reduce” and an average target price of $12.06.

DXC Technology Company Profile

DXC Technology, headquartered in Tysons Corner, Virginia, is a global leader in IT services and solutions. The company was formed in 2017 through the merger of Computer Sciences Corporation (CSC) and the Enterprise Services business of Hewlett Packard Enterprise, combining decades of experience in consulting, systems integration and managed services. Since its inception, DXC has focused on helping clients modernize IT environments and drive digital transformation across their organizations.

DXC Technology’s core service offerings encompass cloud and platform services, applications and analytics, security, and workplace and mobility solutions.