Sapient jumps before joining S&P 500
Shares of the software maker jump 20 percent as it prepares to join the Standard & Poor's 500 index.
The company will replace Reynolds Metals at the end of trading today. Alcoa closed its $5.75 billion stock and debt purchase of Reynolds yesterday.
In midday trading, shares of Cambridge, Mass.-based Sapient rose $15.88 to $95.25 on volume of 5 million shares, more than six times the stock's average daily volume. The shares have traded between $151.88 and $23.87 during the past 52 weeks.
Sapient designs software systems and provides Internet consulting for financial, communications, energy, manufacturing, government and health care companies.
Being added to the S&P 500 typically makes a company's shares rise because many mutual funds load their portfolios with S&P 500 stocks. Fund managers' performance is often compared with the S&P 500, which requires them to own a mix of stocks that comprise the index.
During its first quarter, Sapient's net income rose to $11.9 million from $4.28 million a year earlier. Revenue increased to $100.3 million from $57.8 million.
Excluding amortization of intangibles, acquisition costs and stock-based compensation, Sapient earned $12.7 million, or 19 cents a share, which beat the 17 cents predicted by analysts surveyed by First Call.