Cambridge Tech loss beats expectations
The professional services firm reports a narrower-than-expected fourth-quarter loss but says it expects losses to continue into the first half of the year.
Net loss for the period was $17.3 million, or 28 cents per share, on revenues of $145 million. That compares with a profit of $16.3 million, or 26 cents per share, on revenues of $160.2 million in the same period in 1998.
Analysts expected the Cambridge, Mass.-based professional services firm to post a loss of 30 cents per share, according to a survey by First Call.
The company said it expects to continue its loss position in the first half of the year, partly based on flat revenues compared to the year-earlier period and partly due to the company's need to fund its growth in Internet services.
For most of last year, Cambridge, along with its rivals Electronic Data Systems, Computer Sciences, IBM Global Services and the Big Five consulting firms, began to revamp its focus and strategy based on an overall shift in the services market. The larger services firms began to feel competitive pressure from smaller Internet firms that were nabbing more deals--and Wall Street's favor--as companies increasingly move their businesses online.
Once a Wall Street darling itself, Cambridge struggled with a reorganization, executive turnover, plummeting stock price and revenue shortfalls for most of last year.
While the company projects revenues to be flat for the first half of this year, it also said it expects continued growth in its e-business revenues.
The company said it experienced strong demand for its e-business services in 1999, which represented about $243.3 million, or 39 percent, of its total revenues. That compares to $190.9 million, or 31 percent, in the year prior. Cambridge said total revenues for 1999 reached $628.1 million, vs. $612 million for the same period a year ago.
For 2000, Cambridge plans to move forward with its e-business strategy by focusing on client work that involves providing Internet services such as Web strategy and development, the company said in a statement.
Cambridge also plans to invest $20 million in training and career development as well as internal operations. Additionally, the company said it will continue to rebuild its executive management team.
Earlier this week, the company named John Gavin as its new chief financial officer. Gavin, 44, replaces former CFO and longtime executive Arthur Toscanini, who left Cambridge last November to pursue other interests.