NCOG--dow jones excerpts
<<"We cannot attribute any of the decline to any corporate events or disclosures," an NCO Group spokesman said. "We attribute some of it to some of the postings in various chat rooms."
According to the spokesman and to a CIBC analyst, the chat-room scare centered on an expected revenue shortfall, recent layoffs, and a lawsuit rumor.
In a Yahoo!Finance message dated Dec. 3, a user introduced himself or herself as the president and chief executive of "St. Heart Productions, LLC," which planned to file a $20 million lawsuit against NCO Group, according to the message.
"We don't know who the individual is," the spokesman said. "We assume he's a debtor but we don't think there's any basis for anything he's saying in the chat room."
"You must be short NCOG," wrote a Yahoo!Finance user in response on Dec. 4.
The lawsuit threat is "total baloney," said analyst Andrew Lanyi of CIBC World Markets.
NCO Group confirmed chat-room rumors that the company will have a shortfall in fourth-quarter revenue.
"We think we'll be below the median analysts' expectations," the spokesman said, but added that the shortfall will not affect earnings per share, which are expected to be on target. A consensus estimate of analysts surveyed by First Call/Thomson Financial calls for the Pennsylvania-based teleservices company to earn 40 cents a share for the fourth quarter ending Dec. 31.
The NCO Group spokesman also confirmed that the company laid off about 2% of its employees last week. Weaker business in the fourth quarter prompted the layoffs, he said.
"Traditionally, the fourth quarter is our softest quarter," he said, adding that layoffs are "not inconsistent with past practices.
"Unfortunately, it's the first time we've ever had to deal with them in a chat room," he said.
He traced fourth-quarter weakness to delays in contracts for the company's healthcare services division.>> |
