Keane Corp, the computer services company, has warned that its second quarter net income will not make analysts expectations, due to a drop in Year 2000-related business. Earnings for the rest of the year will also be lower than expected, the company said.
Keane now expects second quarter earnings per share of 37 cents, and sales of between $280m and $282m. Analysts were expecting 41 cents per share. For the full year, ending December 31, it expects flat revenue of $1.1bn, and earnings per share in the $1.40 to $1.50 range, after charges. Analysts had expected earnings of $1.63.
Keane saw Y2K-related revenue of $370m last year, and seen 30% to 35% year on year growth over the last few years because of the Y2K boom. But CEO John Keane now says that this month he saw the first clear indications of a softening in non-Y2K revenue.” The company’s other business has not been growing fast enough to replace that loss. Keane still expects growth rates of up to 25% over a three to five year range.
