Perot Systems issues 2Q profit warning

That huge sucking sound investors heard after the bell Thursday was Ross Perot, chairman of Perot Systems, warning that his company will miss sales and earnings estimates in its second quarter.

Perot Systems (NYSE: PER), which provides a variety of technology consulting and e-business services, said its second quarter earnings will fall below the 15 cents a share it earned in the year-ago quarter.

First Call Corp. consensus expected Perot Systems to earn 17 cents a share in the quarter.

Company official blamed a pair of client-related problems for the shortfall.

First, the East Midlands Electricity contract terminated in late 1999 due to a takeover; and second, reduced revenue from UBS due to cost reductions, will cause existing account revenue to decline year-to-year.

Excluding these two accounts, existing long-term accounts for the second quarter of 2000 are expected to grow over the same period in the prior year.

"While we see positive results in the form of long-term contract signings; declines from EME and UBS this year are offsetting these gains," Perot said in a prepared release.

Last quarter, Perot Systems topped analysts' estimates, pocketing $18.9 million, or 17 cents a share, on sales of $274.6 million.

Its shares peaked at 29 9/16 last June before slumping to a 52-week low of 14 1/8 earlier this month.

Five of the eight analysts following the stock maintain either a "buy" or "strong buy" recommendation.