DXC Technology Company (DXC) saw its stock plummet 12.86% in after-hours trading on Wednesday, despite reporting better-than-expected fourth-quarter results. The sharp decline appears to be driven by the company's disappointing outlook for the upcoming fiscal year.

For the fourth quarter, DXC reported adjusted earnings per share of $0.84, surpassing the IBES estimate of $0.77. Revenue came in at $3,169 million, also beating the expected $3,133 million. The company's Q4 net income stood at $263 million, with an adjusted EBIT margin of 7.3%.

However, investors seemed to focus on DXC's guidance for fiscal year 2026, which fell short of market expectations. The company forecasts total revenue for FY2026 to be in the range of $12.18 billion to $12.44 billion, with non-GAAP diluted EPS projected between $2.75 and $3.25. For the first quarter of fiscal 2026, DXC expects revenue between $3.04 billion and $3.09 billion, with non-GAAP diluted EPS of $0.55 to $0.65. This outlook appears to have disappointed investors, leading to the significant after-hours sell-off.