Net consultant cuts work force and earnings expectations
AnswerThink trims its staff about 8 percent and expects a fourth-quarter profit shortfall, making it the latest Internet consulting company bruised by the overall market slowdown.
The Miami-based company cut about 150 jobs, primarily from its consulting staff, as it shifts its focus away from serving dot-com clients, AnswerThink said late Tuesday. The company's overall staff stood at about 1,800 before the reduction.
With the strategy shift and the deferral of certain projects during the quarter, AnswerThink said late Tuesday that it expects fourth-quarter revenue and earnings to miss earlier forecasts. Revenue for the quarter is now expected to be $68 million to $70 million, with net income between break-even and $1 million. In its most recent quarter, the company posted $84 million in revenue.
Like a number of Internet consulting companies, AnswerThink has suffered as demand has slowed from its typical dot-com clientele, most of which have spent the latter part of 2000 on the path to the poor house and struggling to stay alive.
"While dot-coms have historically represented less than 15 percent of our business, the diminished demand for these types of projects impacted our fourth-quarter results," AnswerThink chief executive Ted Fernandez said in a statement. The company said it intends to focus its business on larger client relationships, from which it expects strong demand in 2001.
For full-year 2001, AnswerThink said it now expects sequential quarterly revenue growth of 3 percent to 7 percent, for an annual total of $320 million to $325 million. Analysts polled by First Call/Thomson Financial expected the company to earn $398 million in revenue next year. Net income for the year is projected to be in the range of $23 million to $25 million, or 49 cents to 53 cents per share.
The fourth quarter also will include a nonrecurring charge of approximately $7.5 million, primarily for costs relating to reduction of staff dedicated to dot-com initiatives.
The 3-year-old company employs about 1,600 workers and operates 17 offices in the United States and in Europe.