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Comdisco shares jump on earnings report

The computer management and services firm's shares rise after it reports fourth-quarter earnings a penny ahead of analysts' estimates, backed by a hike in revenues.

    Shares in Comdisco jumped yesterday after the computer management and services firm reported fourth-quarter earnings a penny ahead of analysts' estimates, backed by a hike in revenues.

    Comdisco shares rose nearly 10 percent before closing up 1.56 at 22.88, a 7 percent gain. The trading volume more than doubled.

    For the quarter, the company said net income was $44 million, or 27 cents per share, compared with $37 million, or 23 cents, for the same period a year earlier. Analysts polled by First Call projected the company to earn 26 cents a share.

    Total revenue for the company's fourth quarter was $984 million, up from $904 million a year ago.

    Including the operational losses from Prism Communication Services, a Comdisco subsidiary, Comdisco reported net earnings of $30 million, or 19 cents per share for the quarter.

    For the year ended September 30, 1999, Comdisco reported net income $167 million, or $1.03 a share, vs. $151 million, or 93 cents, in its year-ago period, beating the First Call Consensus estimate of $1.01 a share. Including the operational losses from Prism and the previously announced $150 million charge due to the sale of some of Comdisco's assets during its second quarter, the company said net earnings were $48 million, or 30 cents, for fiscal year 1999.

    For the year, total revenue was $4.2 billion, an increase from last year's $3.2 billion, the Rosemont, Illinois-based company said.

    Comdisco said that it expects Prism's operating losses will continue to increase as it builds its communication network to offer services to 33 markets in the United States and 3 in Canada. Prism is a start-up company that has incurred operating losses since its inception. Through Prism, Comdisco said it's developing a high-speed digital network which will provide customers with advanced network connections.

    Comdisco chief executive Nick Pontikes said the company had "another year of extraordinary change" and said he's optimistic about entering the next fiscal year with "a record services backlog over $1.2 billion."

    "With the combination of our strong financial position and global business model we look forward to the opportunities the millennium will bring," Pontikes said in a statement.