Computer Horizons beats Street
The company, which offers Year 2000 solutions, posts record revenues to beat estimated earnings for its second quarter.
Revenues for the second quarter of 1998 increased by 48 percent to $123.7 million from $83.6 million in the year-ago quarter. Excluding merger-related expenses, net income was $11 million compared with $5.3 million in the second quarter of 1997. This represents an 107 percent increase in net income.
Computer Horizons posted earnings of 34 cents per share for the second quarter, beating Wall Street expectations. According to First Call, analysts had expected the company to earn about 32 cents per share.
"We are extremely pleased with the record financial results we reported for the second quarter," said John Cassese, Computer Horizon chairman and president, in a prepared statement. "[We] are confident that our international and domestic growth strategies will lead the company well beyond the Year 2000."
The acquisition of Canadian-based Informatics Search Group on July 3, 1998 is not included in results. Including expenses of $2.2 million for the merger with Spargo Consulting, second quarter 1998 net income totaled $9.5 million, or 30 cents per share.
"I would say that large companies that have a Year 2000 conversion practice like Computer Horizons and Keane will continue to see sequential revenue growth in Year 2000 revenue for probably the next 18 months," said William Loomis, an analyst at the investment banking firm of Legg Mason Wood Walker. "The growth could extend maybe a little beyond [1999] but certainly through 1999."
Computer Horizon shares were down more than 5 percent in morning trading at $38. The company's stock has traded as high as $53.5 and as low as $25.75 during the past 52 weeks. Keane was trading slightly up at $56, having hit as high as $60.94 and as low as $24 in the past 52 weeks.