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December 7, 1987

GARTNER GROUP WARNS OF PROFIT FALL

By CBR Staff Writer

Gartner Group Inc, Stamford, Connecticut yesterday warned of a short-term decline in earnings levels until revenue growth catches up with investment in expanded resources. Chairman and president Gideon Gartner, said earnings for the company’s third fiscal quarter to December 31 would probably be down to near break-even – significantly below results for the similar period a year ago, when the company did $536,000 net, although he expects revenues do show a strong increase on the $6.3m this time last year. While the annualised value of the company’s continuous service contracts has increased approximately 43% during the last 12 months to November 30, the expenses that we put in place during the current fiscal year from April 1 were in anticipation of a higher rate of growth than has materialised year to date, Gartner said. Continuous service contracts represent approximately 75% of total revenues. Other revenues, specifically from our consulting operations and from our Comtec market research database, are also falling short of plan. Our recent orders appear to be strong, indicating continuing momentum. Yet, one cannot ignore the likelihood that business conditions will worsen, perhaps significantly, as a result of the collapse of worldwide equity markets and other fundamental factors. We are taking a prudent look at our spending plans, and developing contingency strategies.

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