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DXC Technology posts better-than-expected Q3 profit on rebounding cloud demand

(Reuters) - DXC Technology reported better-than-expected quarterly results on Thursday, on the back of strong demand for its cloud solutions from clients turning towards artificial intelligence (AI).

The IT industry's operations have seen a massive shift from traditional to cloud-based services as clients increasingly turn towards more agile, productive and cost-considerate work processes.

Additionally, DXC reaped significant returns from its digital business and partnerships, allowing the company to expand its cloud computing services.

Smaller companies such as DXC compete with the likes of Accenture, IBM and Amazon's AWS for IT and professional services and cloud-computing services.

Shares of DXC rose 1.4% in trading after the bell.

The Tysons, Virginia-based company reported third-quarter revenue of $3.40 billion, beating expectations of $3.36 billion, according to LSEG data.

Adjusted earnings were 87 cents per share, above estimates of 77 cents per share.

Although DXC had a good quarter, the IT services company tightened its annual forecast for the third time.

DXC expects to report revenue in the range of $13.63 billion to $13.67 billion annually, compared with its prior forecast of $13.58 billion to $13.73 billion.

Adjusted earnings are expected to be $3-$3.05 per share for 2024, compared with the prior range of $3.15-$3.40.

Separately, the company also appointed Raul Fernandez as its President and Chief Executive Officer, effective immediately. Fernandez had been the interim President and CEO of DXC since December 2023.

(Reporting by Yamini Kalia in Bengaluru; Editing by Krishna Chandra Eluri)