Key Highlights

● DXC shares were down 12.15% at $13.38 in pre-market trading on Oct. 30.

● Fiscal second-quarter Revenue fell 4.0% to $3.03 billion, with bookings down 10%.

● Fiscal 2027 non-GAAP EPS guidance was cut to $2.25 to $2.50.

● DXC is in talks about a possible sale of its insurance business.

DXC Technology (NYSE:DXC) is among the steepest decliners before Friday's open. A pre-market movers table, in a snapshot updated at 8:23 a.m. ET on Oct. 30, showed the stock at $13.38, down 12.15%. The trigger is the IT services company's fiscal second-quarter report, released after Thursday's close.

An automated news note mentions guidance well below expectations and price-target cuts, though it also referred to "fiscal 2025," which appears stale. The guidance cut itself is confirmed by the company's release as summarized by one report. Details of individual analyst target changes were not found, so those are not confirmed here.

What DXC reported

For the quarter, DXC reported revenue of $3.03 billion, down 4.0%, with the decline also showing up on an organic basis, according to one report's summary. Diluted EPS fell to $0.15 from $0.20, and adjusted EPS dropped 20.2% to $0.67. Adjusted EBIT fell 26.4% to $187 million, for a Margin of 6.2%.

Cash flow and bookings were weaker too. Free Cash Flow was $91 million, down from $240 million a year earlier, although first-half free cash flow rose to $405 million from $337 million. Bookings fell 10% to $2.4 billion. Bookings are a key signal for a services firm because they feed future revenue.

The biggest hit is the outlook. DXC now expects fiscal 2027 revenue of $11.91 billion to $11.98 billion, an organic decline of 5.0% to 5.5%, and non-GAAP EPS of $2.25 to $2.50. Back in its first-quarter report, it had guided to $12.10 billion to $12.35 billion in revenue and $2.40 to $2.90 in EPS. That means both the revenue range and the EPS range moved lower, with the top of the EPS range cut by $0.40.

There were bright spots. Insurance revenue rose 23.1%, and DXC bought back $60 million of stock. The company also said it is in discussions about a possible sale of its insurance business, according to the summary, which could unlock value but would also remove its fastest-growing unit.

Why this matters and what to watch

DXC, based in Ashburn, Virginia, provides IT outsourcing, infrastructure management, application modernization and industry software to large companies and governments. It reports three segments: Consulting & Engineering Services, Global Infrastructure Services and Insurance Services.

The stock trades on the New York Stock Exchange and is part of the NYSE Composite. Its struggle reflects a wider problem for legacy IT services firms: clients are shifting budgets toward cloud and AI projects, and AI tools can shrink the labor-heavy contracts that once drove revenue. DXC has pushed AI offerings, including work with LangChain announced Oct. 13 and AI-led managed services, but those efforts have not yet stopped the revenue decline.

The macro tone is not helping. S&P 500 futures were down 1.13% around 8:03 a.m. ET, per market quotes, as Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC) weighed on tech. The 10-year Treasury Yield sat near 4.94%, according to market data, keeping pressure on companies that need to refinance debt.

Key risks include further bookings declines, client losses, execution on cost cuts, and uncertainty over the insurance Business sale. Watch for analyst reactions after the open, any formal sale announcement, and the third-quarter report early next year for signs that bookings are stabilizing. With the shares now trading in the low teens, investors will also want clarity on how DXC plans to use cash between buybacks, Debt reduction and Investment in its AI offerings.