Shares of DXC Technology Co.
sank 30.6% on heavy volume in afternoon trading Friday, on track for the biggest one-day selloff in 18 years, after the software company reported fiscal first-quarter earnings that topped expectations but lowered its full-year guidance, citing currency headwinds, pressure on its legacy businesses and delays in some deals. Trading volume swelled to 15.6 million shares, compared with the full-day average of about 2.3 million shares. Analyst Arvind Ramnani at KeyBanc Capital downgraded DXC to sector weight, after being at overweight the past two years. “Although DXC is seeing good growth in its digital business, revenue compression in its infrastructure business accelerated; further, there is lack of visibility of [medium-term] targets given underlying revenue pressures are secular in nature,” Ramnani wrote in a note to clients. The stock, on track to close at the lowest level since May 2016, is headed for the biggest decline since the record drop of 39.6% on March 16, 2001, according to a FactSet chart that predates the 2016 merging of Computer Sciences Corp. and the services assets of Hewlett-Packard Enterprise Co.
The stock has now shed 40% over the past three months, while the SPDR Technology Select Sector ETF
has gained 3.6% and the S&P 500
has tacked on 1.8%.
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