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May 1, 2009

Convergys Q1 profit dips 22%

Customer management revenue grew 9% to $517m

By CBR Staff Writer

Customer care and billing services provider Convergys has reported a 22% decline in net income to $28m for the first quarter 2009, compared to $36m in the year-ago quarter, on revenue down 3% at $694.7m.

Operating income was almost flat at $38.8m, while diluted EPS fell 18% to $0.13. Cash flow from operating activities and free cash flow were $56m and $33m, respectively, compared with $26m and $7m in the same period a year ago.

The company said customer management revenue grew 9% to $517m, information management revenue fell 34% to $107.6m, and HR management revenue fell 9% to $70.2m.

David Dougherty, president and chief executive at Convergys, said: In a challenging environment, we met revenue and exceeded earnings expectations and are affirming our earnings guidance. Our pipeline remains robust and we continue to sign substantial new business, although we are seeing some softness in call volumes. We are expanding our delivery footprint and are further improving the efficiency and cost structure of the operation.

For fiscal 2009, the company expects EPS between $0.90 and $1.10 and free cash flow of approximately $200m.

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