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April 21, 2004

ACS grows net profit 25% in third quarter

Outsourcing vendor Affiliated Computer Services Inc underlined its status as one of the most consistently profitable players in the IT services sector in its third financial quarter.

By CBR Staff Writer

In the three months to March 31, 2004, the Dallas, Texas-based company grew net profit 25% to $99.7m, which included a $3m net gain on the sale of its contracts with Hanscom Air Force Base to ManTech International Corp, and was also boosted by income tax benefits relating to last year’s R&D activities. If these factors are stripped out, net profit grew 18%.

Revenue increased 2.8% to $1.01bn, but ACS said that excluding revenue from the Federal Government unit it sold to Lockheed Martin Corp last year and the disposed Hanscom contracts (worth some $25m in annual sales), revenue increased 25% year-on-year.

During the quarter, ACS signed $146m of annualized revenue in new deals which included a seven-year deal with fast food giant McDonald’s Corp to support more than 6,000 desktops, as well as a 10-year deal to manage the human resources functions of Goodyear Tire and Rubber Co.

ACS said it is on target for revenue of between $4.48bn to $4.56bn in the year ending June 2005, which would rank it as one of the best-placed second outsourcing operators. In 2003, ACS ranked as the seventh-fastest growing of the world’s 50 largest IT services vendors, according to ComputerWire research.

This article is based on material originally published by ComputerWire

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