Amazing performance. I'll listen to the call tomorrow. Thanks for the recap.
Comdisco first-quarter profit more than doubles
ROSEMONT, Ill., Jan. 31 (Reuters) - Comdisco Inc. <CDO.N>, which helps companies obtain and run computer systems, on Wednesday said its fiscal first-quarter earnings more than doubled, exceeding Wall Street's heightened expectations, on the strength of its leasing and ventures business.
Comdisco said earnings rose to $88 million, or 56 cents a share, from $42 million, or 26 cents a share, a year earlier. Prior-year results included losses of $17 million, or 11 cents per share, from discontinued operations.
The analysts' consensus forecast was 50 cents, according to First Call/Thomson Financial, which tracks such data.
Comdisco said last month that it expected to exceed what was then a consensus estimate of 40 cents by about 10 cents a share.
The company said two of its three units exceeded targets, but said its technology services business turned in a disappointing performance, and it must make "dramatic profitability" improvements in the unit.
"We experienced larger than expected costs in technology services due to our level of investment in the web services business as well as losses associated with our network services business," President and Chief Executive Phil Hewes said in a statement.
The company said on Jan. 9 it will stop providing managed network services.
"We need to make dramatic profitability improvements in our services business," Hewes added. "We have a number of initiatives currently in place to address the problems."
Revenues for the first quarter rose to $909 million from $876 million a year ago.
Pre-tax earnings for Comdisco's leasing business were $20 million for the quarter, exceeding its target by $2 million, or 11 percent.
Its ventures division exceeded pre-tax profitability targets by 57 percent, earning $110 million for the quarter.
Also, during the quarter, Comdisco paid down about $505 million, or 32 percent, of $1.6 billion in senior unsecured debt, excluding commercial paper or revolving bank lines, scheduled to mature in fiscal 2001.
The company said it paid down the debt with a combination of cash on hand, cash flow from operations and the financing of lease receivables.
11:03 01-31-01 |
