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Whittman-Hart earnings top forecasts

The midmarket IT services firm reports record first-quarter revenues and profit, beating Wall Street analysts' estimates by a penny.

Midmarket IT services firm Whittman-Hart today reported record first-quarter revenues and profit, beating Wall Street analysts' estimates by a penny.

The Chicago-based company reported net income, before costs associated with the acquisition of Waterfield Technology Group, of $7.5 million or 13 cents per share for the quarter-ended March 31. Wall Street analysts expected the company to earn 12 cents a share, according to First Call.

Quarterly earnings after acquisition costs were $5.6 million or 9 cents per share.

For the year-ago quarter, the company reported earnings of $3.6 million or 7 cents per share.

Meanwhile, first-quarter revenues rose 62 percent, after restatement for the acquisition, to $104.1 million from $64.4 million for the same period a year ago.

Despite strong results, the company's stock has continued to slide. Shares were trading this afternoon at $17.875, up from a 52-week low of $13 and down from $35.125.

Frank Sparacino, analyst at Barrington Research, said investors are concerned about the overall slowdown in the enterprise resource planning (ERP) software market. About 20 percent of Whittman Hart's business comes from ERP-related services, he said.

"[Whittman Hart] gave no indications whatsoever that their business is slowing down but people are being more cautious at this point," Sparacino said. "The report was good and the outlook was strong."

The company credited its strong results to demand for Web-enabled custom applications, electronic commerce solutions, data warehouses and ERP implementations. Wall Street analysts expect the company to grow about 40 percent annually, compared to industry-wide growth of about 16 percent.

The firm, which has 3,100 employees and focuses on providing IT services to midsized companies, this week opened a St. Louis branch, which is focusing initially on Web-enabled application development, electronic commerce, and J.D. Edwards enterprise software implementations.

The company acquired Boston-based IT services firm Waterfield last month.