Following a hold-up while it investigated accounting errors from prior years, CSC has finally reported on its Q1 and Q2 performance, which sees Europe coming out well.

The delay was due to the discovery of certain accounting errors related to accounting for income taxes and for the effect of foreign currency exchange rates from previous financial years. The corrections in accounting for income taxes resulted in a cumulative charge of $303 million for fiscal years 1995 through March 30, 2007, the company said.

CSC reported it swung to a first-quarter net profit of $108.1 million, or 61 cents a share, from a restated net loss of $59.9 million, while revenue for the quarter came in at $3.84 billion versus $3.56 billion the previous year. For the second quarter, the company posted net earnings of $75.8 million, while revenue for the period came in at $4.02 billion versus $3.61 billion.

European revenues grew 18% during the quarter and 17% for the half year. In constant currency, second quarter and year-to-date revenues increased 9%, making Europe the firm's strongest performer. “The really pleasant change in the company's FY08 performance is in Europe,” said research house Ovum's Phil Codling.

“While CSC as a whole stalled in FY07, in H1 Europe grew by 17% to $2.20 billion, with constant currency growth of 9%. CSC's expanded NHS commitments account for some of this improvement, but CSC Europe is proving it is no one-trick pony. Growth appears to be more broad-based, with higher revenue from consulting and SI business in Europe, reflecting CSC's hiring efforts in these areas.”

CSC CEO Mike Laphen conceded that Europe was outperforming the US. “The European environment, I am pleased to say, has picked up for us quite nicely both in France and Belgium and in what we call our 'central market', with the exception of Italy – we are still struggled a bit there.”