Keane profit falls below estimates
The computer services firm reports third-quarter earnings below Wall Street estimates and warns its fourth-quarter results will be lower than expected.
The Boston-based firm said third-quarter net income was $19.4 million, or 27 cents a share, compared to $29.2 million, excluding merger-related charges, or 40 cents a share during the same period a year earlier. Analysts polled by First Call projected the company to earn 31 cents for the quarter.
The company, which competes in the computer services and consulting arena against EDS, CSC, KPMG, and others, also warned fourth-quarter earnings will be much lower than anticipated.
The firm said it expects revenues for the next quarter to be between $220 million and $230 million and earnings per share to be in a range of 15 cents to 18 cents, which is a drop from the current consensus estimate of 28 cents from First Call.
The company said its weaker fourth-quarter results are due to "conservative buying behavior" among customers based on Year 2000 concerns.
"This is a result of a combination of seasonally low utilization typical of the fourth quarter, Y2K revenue runoff, and the tendency of customers to defer the start of new projects until after the millennium," Keane chief executive John Keane said in a statement.
For the third quarter, Keane said revenues fell 10.5 percent, down to $255.6 million from $285.5 million for the year-ago period.
During the third quarter, the company said bookings in application management outsourcing were strong, and its growing sales pipeline is evidence that Keane is being considered for larger deals.