Boston-based IT consulting firm Keane Inc reported second-quarter results that matched lowered Wall Street expectations, with net income of $26.6m, or $0.37 per share, on revenue up 5.1% year- over-year at $280.5m. Earnings were essentially flat with the previous quarter’s $26.8m and up 17.3% from $22.7m, or $0.31, in the year-ago quarter – which included one-time merger-related charges of $4.1m.
The company says that late in the quarter it began to see signs that clients are reluctant to begin new IT initiatives until after the millennium. That issue, combined with the expected decline in Y2K business, resulted in revenue and earnings that were below earlier expectations. On the bright side, however, Y2K revenue in the quarter accounted for 22% of total revenue, down from roughly 36% in the year-ago period, while revenues in core businesses grew 28%.
Keane says it is working to align costs with revised revenue expectations and reckons it can maintain strong margins. The company previously said it expects revenues for the full year to be flat with 1998 revenue of $1.1bn and earnings per share to be in a range of $1.40 to $1.50. For the six-month period, net income rose 24.9% to $56.8m on revenue up 13.8% at $565.5m, while earnings per share came in at $0.78, up from $0.64 last year. รก
