Keane Inc. today reported third quarter earnings for the period that reflected a slowdown in customer demand for new IT implementations until after millennium-related issues are resolved.
Revenue for the quarter ended September 30 declined 10.5% to $255.6 million, compared with the year-ago period. Net income was also down, falling to $19.4 million, or 27 cents a share, compared with $27.2 million, or 38 cents a share, in the comparable period last year. Year 2000-related revenue was $41 million, compared with a peak of $104 million during the third quarter of 1998.
In a statement released today, company chairman and CEO John Keane said: "We have only a few months of Y2K runoff remaining, and we look forward to resuming strong growth in our core business next year." Keane said Y2K projects have allowed the company to cross-sell about $1.2 billion in other services, but customers are reluctant to implement new projects until after the new year, due to Y2K-bug concerns.
Results for the nine-month period ended September 30 were a bit brighter than the third quarter's earnings. Revenue was $821.1 million, up almost 5% over revenues of $782.4 million for the same nine-month period in 1998. Net income was also up almost 5% to $76.2 million, compared with $72.7 million year-over-year.