You are correct but then they warned that the last of this year would be weak. I'm just not sure why the stock went up over a dollar on the news unless investors liked what John Keane said about future plans.
Keane Inc sees challenging Q4
BOSTON, Oct 19 (Reuters) - Keane Inc. <KEA.A> reported declining third quarter profits on Tuesday, and said it expects the fourth quarter to be challenging in
part due to Y2K revenue runoff and the tendency of customers to defer the start of new projects until after the millennium. The company said it expected fourth
quarter revenues of $220 million to $230 million and earnings per share for the quarter to be in a range of $0.15 to $0.18. Analysts were expecting $0.28 per share,
according to First Call. "We expect the fourth quarter to be the most challenging one in our transition. This is a result of a combination of seasonally low utilization
typical of the fourth quarter, Y2K revenue runoff, and the tendency of customers to defer the start of new projects until after the millennium," Keane said.
The provider of software consulting, integration and management posted a quarterly net income of $0.27 per diluted share on revenues of $255.6 million, down from
a profit of $0.38 per diluted share on revenues of $285.5 million the prior year. Net income for the third quarter in 1998 included merger-related costs.
Analysts expected a profit of $0.31 per share, according to First Call/Thomson Financial.
"During the third quarter we continued to transition Y2K revenues to other strategic business. In the most recent quarter, Y2K revenues represented just $41 million
in revenue compared to a peak of $104 million during the third quarter of 1998," John Keane, chairman and chief executive officer, said, adding "Fortunately, we
have only a few months of the Y2K runoff remaining, and we look forward to resuming strong growth in our core business next year." According to Keane, the
company will not be able to fully offset the decrease in Y2K revenues during the last six months of 1999 "due to the reluctance of clients to initiate new IT projects
until after the first of the year," he said. Keane referred to 1999 as a building year for the company as it has been working on its e-solutions capabilities. "We will
continue to aggressively launch new e-Solutions initiatives. We anticipate the transition from Y2K coupled with conservative buying behavior among customers to
continue through the balance of this year and early next year," Keane said. |
