The company's bookings grew more than 20% for the second straight quarter, and the book-to-bill ratio exceeded one.

Shares of Ashburn, Virginia-based DXC Technology Company (DXC) fell over 14% in extended trading on Wednesday after the company issued weak forward guidance despite reporting a quarterly beat and signaling its intention to restart the stock repurchase program.

DXC Tech, an IT services company, reported adjusted earnings per share (EPS) of $0.84 for the fourth quarter of the fiscal year 2025, marking a 13.4% year-over-year (YoY) decline but above the consensus estimate of $0.77.

Revenue fell 6.4% YoY to $3.17 billion, with the drop being a more modest 4.2% on an organic basis. 

The results also exceeded the guidance issued by the company in early February and the Finchat-compiled consensus. 

DXC Tech noted that the book-to-bill ratio was 1.22 times compared to 0.94 times in the year-ago quarter. 

President and CEO, Raul Fernandez, said, "Our fourth quarter results represent continued progress toward our goal of achieving sustained, profitable revenue growth."

He also noted that bookings grew more than 20% for the second straight quarter, and the book-to-bill ratio exceeded one.

While acknowledging the uncertain macro backdrop, Fernandez said the company remains focused on its priorities, delivering its deep and broad capabilities to its customers, driving performance.

Looking ahead, DXC Tech guided first-quarter adjusted EPS to $0.55-$0.65 and revenue to $3.04 billion-$3.09 billion, below the consensus estimates of $0.77 and $3.12 billion.

The company reduced its fiscal year 2026 adjusted EPS guidance to $2.75-$3.25 from $3-$3.25 and the revenue guidance to $12.18 billion-$12.44 billion from $12.80 billion-$12.83 billion.

On the earnings call, CFO Robert Del Bene said the company expects 2026 global business services revenue to decline by low single digits, reflecting the larger, longer-duration deals booked in the second half of fiscal '25 and increased economic uncertainty, particularly with shorter-term project-based services, according to a Koyfin transcript.

Fernandez said on the call that the company will restart the stock buyback program due to the company's confidence in the future.

In a separate release, the company said its board has approved special equity grants for the CEO and CFO and extended their employment agreements through the fiscal year 2028.

On Stocktwits, sentiment toward DXC Tech stock was 'extremely bullish' (87/100) by late Wednesday, with the message volume at an 'extremely high' level.

DXC sentiment and message volume as of 11:54 p.m. ET, May 14 | source: Stocktwits

 

A bullish user pointed to the double beat and advised against selling cheaply to manipulators.

Another user blamed the plunge on hedge funds pushing the price lower on anemic volume in over-the-counter transactions.

If the after-hours slide is sustained on Thursday, the stock is set to witness its biggest single-day drop in a year.

DXC Tech stock has lost more than 17% this year.

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