The Cambridge, Massachusetts-based IT consulting firm posted fourth quarter revenues of $52.5 million, up from $26.9 million a year ago.
Net income for the quarter, excluding a charge for the acquisition of Exor Technologies, was $6 million, up 68 percent from a year ago. Earnings per share rose 54 percent to 21 cents from 14 cents a year ago, beating Wall Street estimates by a penny, according to First Call.
For the year, Sapient reported net income, excluding charges, of $20.7 million, or 74 cents per share. That compares to net income last year of $12.7 million or 49 cents a share, excluding a one-time $560,000 charge.
Revenues in 1998 increased 77 percent to $160.3 million from $90.36 million for 1997. The company absorbed a one-time $11.1 million charge for the acquisition of Web design company Studio Archetype. That charge was partly offset by a tax benefit of $4 million, the company said.
Sapient competes with privately held rivals Scient and Viant, as well as publicly held Cambridge Technology Partners, and USWeb/CKS. These companies have been busy selling themselves as one-stop shops capable of building Web sites and e-commerce applications and connecting them to sophisticated back-end database and transaction systems.
According to Cambridge, Massachusetts-based market research firm Forrester Research, the e-commerce and Internet/intranet services market is estimated to rocket to nearly $33 billion by 2002, with an annual growth rate of 60 percent predicted.
Analysts expect Sapient's growth to reflect that market boom. In a research note posted this morning, Morgan Stanley analyst Michael Sherrick raised his 12-month price target for the company's shares to $85 from $56, noting that the company's revenue from Web-based services should grow from 45 percent in the fourth quarter of 1998 to 70 percent by next year.
Sapient topped Morgan Stanley's fourth-quarter revenue estimate of $48.6 million, checking in with $52.5 million.
A culture that embraces flexibility has proven key to Sapient's success, enabling the company to nimbly shift from client-server to Internet-based services, Sherrick said.
"Their flexibility has enabled them to see a trend and embrace it," he said.
The company credits its revenue growth to soaring demand for Internet business and e-commerce consulting services, as well as its ability to handle large, complex integration and consulting projects.
Last year, Sapient created and launched two new high-profile Internet banking services, HomeLink and OfficeLink, for BankBoston, among other projects. Newly acquired design firm Studio Archtype redesigned the Web site for online investing service E*Trade, a project that included branding, adding content, and providing new user tools.