Scient warns of 3Q loss, 460 job cuts

The e-consultant slide caught up with Scient (Nasdaq: SCNT).

After market close Wednesday, the Internet consulting firm warned of a fiscal third quarter loss and said it would cut 460 jobs. Scient now expects to lose 16 cents per share, not including restructuring charges, in the December quarter.

First Call's survey of 20 analysts had predicted a profit of 8 cents per share for the quarter ending Dec. 31.

Shares of Scient slid to 3.375 in afterhours trading on the Island electronic communications network, following the warning. Scient fell 0.6875 to 4.5 in Wednesday's regular trading, prior to the third quarter preannouncement.

Scient sees an operating loss of $13 million on third quarter revenue of $80 million, with professional services margins falling to about 50 percent, from 55 percent in the September quarter.

The company plans to record a third quarter restructuring charnge of $40 million to $45 million. Scient plans to slash 325 billable and 135 core services positions in a series of restructuring moves expected to save $60 million in expenses for calendar 2001.

Targets for the fiscal fourth quarter and calendar 2001 will be lowered, Scient said. Specific guidance for those periods will come after the third quarter closes.

Despite the ongoing decline in its stock price, Scient until now managed to avoid the financial disappointments that plagued the e-consulting field in recent months. But though Scient's reliance on pure dot-com firms might not be as great as other consultants, the company now sees slower spending from traditional corporations as well. At the same time, competition has increased from newer consultants and long-established IT services companies.

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