DiamondCluster Lowers 4Q Estimates - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

DiamondCluster Lowers 4Q Estimates

DiamondCluster International Inc. on Tuesday revised financial projections for its fourth fiscal quarter and next year despite revenue growth of more than 100% for the third quarter of fiscal 2001, ended Dec. 31. Citing a slowdown in demand for its E-consulting services as well as costs associated with the merger of Diamond Technology Partners Inc. and Cluster Consulting to form the company in November, DiamondCluster reported revenue of $73.6 million for the quarter, but a loss of $1.2 million, or 4 cents per diluted share.

In preparation for what DiamondCluster chairman and CEO Mel Bergstein believes will be a year without accelerated growth in the services market, the company also revised its fiscal projections for the fourth quarter and next year. DiamondCluster, which had originally projected revenue of $105 million for the fourth quarter, now calculates revenue will be between $93 million and $97 million. This would be slightly above the $90.3 million pro forma revenue for the third quarter, which takes into account the combined revenue for Diamond and DiamondCluster during that period. Revised fourth-quarter earnings-per-share estimates are about 30 cents, down from 35 cents.

For fiscal 2002, DiamondCluster is projecting revenue between $440 million and $460 million and earnings per share of $1.38 to $1.46, down from the estimates of about $560 million and $1.72 per share, respectively.

DiamondCluster is banking on a rebounding economy and strong growth in Europe to help the company increase headcount by 35% without any layoffs in North America, all while increasing revenue by about 30%. Lehman Brothers analyst Karl Keirstead says he's skeptical an economic upturn will arrive in time for DiamondCluster to make its financial projections for 2002. Keirstead also notes that Cap Gemini Ernst & Young and other competitors offering IT and consulting services to European telecommunications companies have recently cut their growth-rate estimates for the year.

Keirstead says reduced demand for E-services in the next quarter will cause most E-service providers to see a 5% sequential decline in revenue. Included in this group is Sapient Corp., which last week reported revenue of $139.2 million for its fourth quarter, ended Dec. 31, up $81.8 million from the same quarter a year ago. The E-service provider's net income for the quarter was $8.1 million, or 6 cents per share, down $1.4 million from the fourth quarter of 1999.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2020 State of DevOps Report
2020 State of DevOps Report
Download this report today to learn more about the key tools and technologies being utilized, and how organizations deal with the cultural and process changes that DevOps brings. The report also examines the barriers organizations face, as well as the rewards from DevOps including faster application delivery, higher quality products, and quicker recovery from errors in production.
Slideshows
10 Trends Accelerating Edge Computing
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/8/2020
Commentary
Is Cloud Migration a Path to Carbon Footprint Reduction?
Joao-Pierre S. Ruth, Senior Writer,  10/5/2020
News
IT Spending, Priorities, Projects: What's Ahead in 2021
Jessica Davis, Senior Editor, Enterprise Apps,  10/2/2020
Register for InformationWeek Newsletters
Video
Current Issue
[Special Report] Edge Computing: An IT Platform for the New Enterprise
Edge computing is poised to make a major splash within the next generation of corporate IT architectures. Here's what you need to know!
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll