For the third quarter ended Sept. 30, Keane Inc., based here, reported income, before charges, of $5.3 million, or 11 cents per share, on sales of $186.6 million. That compares with income of $8.3 million, or 15 cents per share, on sales of $208.6 million for the same quarter last year.
The numbers missed Wall Street estimates by a penny. First Call predicted income of 12 cents per share.
The impact of Sept. 11 on Keane Inc.'s business was painful and personal, said Keane. Two consultants from Keane Consulting Group who were working for a customer at the World Trade Center on Sept. 11 remain among the thousands missing there.
"Our thoughts and prayers are in support of family, friends and colleagues at this time," said Keane.
On the business side, the loss of personnel, temporary suspension of air traffic and lost billings, particularly in New York and Washington, resulted in a total loss of between $1 million and $2 million, said Keane.
At the same time, Keane Inc. signed its largest federal government contract, a $127 million, 10-year deal with the U.S. Air Force, to rebuild and manage its wholesale supply chain.
In addition, Keane reported the firm's Application Development and Management (ADM) Outsourcing business remains strong, accounting for 52 percent of third-quarter revenue.
The sequential decline in ADM Outsourcing is primarily due to a reduction in the size of the deals by a few customers in the high-tech and telecommunications industries that have been severely impacted by the economic slowdown, Keane said.
"However, this in no way changes our strong belief that outsourcing is a highly attractive and stable revenue stream," Keane told analysts.
To illustrate his point, Keane said the company has received notification of the largest ADM Outsourcing win in its history, a $500 million, 10-year agreement with a major health-care organization. The deal, which Keane expects to sign during the fourth quarter, should produce about $50 million in annual revenue, he said.
Meanwhile, Keane told analysts the firm's pending acquisition of Metro Information Services is moving forward, said Keane. The Federal Trade Commission approval has been received, and the Securities and Exchange Commission declared the registration statement effective as of Oct. 19, 2001. Metro's shareholder meeting on the acquisition is set for Nov. 30.
Keane anticipates revenue for the fourth quarter to be between $185 million and $195 million. The company also estimates total revenue in 2002 will be about $1 billion. full datails check out in http://www.crn.com/it-channel/18816476
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