Inacom Corp, the US systems integrator and IT services firm, posted third-quarter earnings just over half the per-share value predicted by analysts, and downgraded fourth-quarter estimates to between 10 and 20 cents a share. Analysts had been expecting the firm to earn 45 cents a share for the current quarter to December 26.
Omaha, Nebraska-based Inacom cited Y2K concerns among customers and product availability issues in the business downturn. It said net income for the three months ending September 25 was $7.1m or 15 cents a share, compared with a year-ago loss of $12.9m or 29 cents a share. Analysts surveyed by First Call had, on average, expected the firm to show a 29 cents a share profit for the quarter. Revenue declined 6.8% on the corresponding period last year to $1.54bn.
The third quarter was a difficult period for our company and the fourth quarter will be a bigger challenge, said Inacom chairman Bill Fairfield. Although we met our overall revenue targets in the third quarter, our revenue mix was unfavorable to improving our profitability, he added. Inacom’s share price crashed 51.54% yesterday following Tuesday’s adverse results announcement, to finish the day at $3.94. President and chief executive officer, GA Gagliardi said the firm, the largest reseller of the Wintel PC platform was facing the same Y2K sales slowdown experienced by other, Wintel providers, IBM Corp Compaq Corp and Hewlett-Packard Co.
