Convergys wins $1.1 billion DuPont contract
Wed Nov 2, 2005 02:19 PM ET
(Adds details; changes dateline, previously NEW YORK)
BOSTON, Nov 2 (Reuters) - Convergys Corp. (CVG.N: Quote, Profile, Research) won a $1.1 billion contract to handle payroll, employee benefits and other human resources functions for chemical company DuPont's (DD.N: Quote, Profile, Research) 60,000 employees around the world.
It is the largest contract ever signed by Convergys, which runs billing systems, customer service centers and human resources operations for other organizations. Its customers include DirecTV Inc., T-Mobile USA, Textron Inc. and the state of Texas.
"Anytime a company gets an order of this size, it's significant," Kaufman Bros. analyst Peter Jacobson said.
Convergys beat out larger rival International Business Machines Corp., which was also competing for the 13-year contract, according to Jacobson.
Convergys has said that it was aggressively pursuing HR services contracts in a bid to turn that into a major driver of earnings growth over the coming years. The DuPont win shows that those efforts are bearing fruit, Jacobson said.
Convergys shares rose 20 cents to $16.39 in afternoon trading. So far this year they have gained 11 percent. The S&P 500 Index has dropped about 1 percent during the same period.
Cincinnati-based Convergys provides human resources services to clients including Bristol-Myers Squibb Co., Fifth Third Bancorp., Office Depot Inc. and Textron.
(With additional reporting by Ben Berkowitz)
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