IT consultant Renaissance Worldwide Inc appears to have entered the dark ages with a profit warning that lower revenues will leave the company breaking even in the fourth quarter. Revenues for the full year are predicted to be in the $870m-to-$910m range with annual earnings per share in the $0.52-to-$0.60 range – well below First Call estimates of $0.84. The news completes an unhappy year for stockholders in the Newton, Massachusetts company and the shares, which stood at $30 in March, dipped another 4.9% yesterday to $6. What has caused investors concern is the difficulty in understanding how the company fails to generate profits supplying a scarce commodity on a cost-plus basis. Renaissance is, however, an outfit in a hurry. It has doubled the number of consultants it employs in the past year and devoured 23 companies in the past 19 months. The company would no doubt like to see a troublesome fourth quarter as a bout of indigestion after such a corporate feast. A main concern is lower-than-expected revenues, attributed by Renaissance to higher-than-expected shutdowns at customers’ premises. For a company whose revenues should top the $1bn mark next year, Renaissance is performing like an immature company in a highly cyclical business and now faces a difficult struggle to restore its credibility in the market.
