DOW JONES NEWSWIRES 
 

A pair of information technology companies reported lower net income late Friday, with Computer Sciences Corp. (CSC) posting a 10% drop on lower revenue and Fidelity National Information Services Inc. (FIS) recording a 73% slump on losses from discontinued operations.

IT providers generally rely on a steady stream of recurring revenue, which will help them through the economic downturn, but weakness in the U.S. financial sector can still affect the companies.

Last month, International Business Machines Corp.'s (IBM) results comfortably topped Wall Street's expectations, but Intel Corp. (INTC) reported poor results amid a write-down and declined to give an outlook, in a sign of how difficult it is to predict the depth of the current downturn.

For the fiscal third quarter ended Jan. 2, CSC reported net income of $160.6 million, or $1.06 a share, down from $179 million, or $1.05 a share, a year earlier. The per-share figure rose as shares outstanding dropped 11%.

Revenue declined 5% to $3.95 billion.

In November, CSC projected earnings of $1 to $1.10 a share on revenue of $4.1 billion to $4.2 billion.

The company received nearly $2.7 billion in new awards during the quarter, with the fiscal-year-to-date total up 21%.

Looking ahead, the company declined to offer a fourth-quarter view, saying uncertainty in the economic climate, volatility in currency-exchange rates and tax examinations made it difficult to predict its earnings performance for the quarter. But it expects the year's results to be at the low end of November's view.

Meanwhile, Fidelity reported fourth-quarter net income of $28.8 million, or 15 cents a share, down from $108.4 million, or 55 cents a share, a year earlier.

Excluding trademark write-downs at its Certegy check-services business and acquisition-related costs, among other items, earnings from continuing operations rose to 48 cents a share from 34 cents, in line with the company's October forecast.

Processing and services revenue rose 0.8% to $862 million for the financial data-processing company; the increase would have been 4.3% on a constant-currency basis. Analysts expected $871 million.

"Our management team and employees have done an excellent job managing through a very difficult environment to achieve these results," said Chairman William P. Foley II.

Looking ahead, Fidelity expects 2009 earnings of $1.60 to $1.66 a share and revenue to be flat to up 2%. Analysts, on average, projected earnings of $1.60 a share and 3% revenue growth to $3.55 billion. First-quarter earnings are seen between 30 cents and 32 cents a share on revenue of $820 million to $830 million. Street estimates were 32 cents and $840 million, respectively.

Shares of CSC were down 0.9% in after-hours trading at $38.48, while Fidelity's were flat at $16.54.

-By John Kell and Kevin Kingsbury, Dow Jones Newswires; 201-938-5285; john.kell@dowjones.com