| To: John Ritter who wrote (28) | 2/7/2000 6:21:00 PM | | From: Ken M | | | |
REUTERS) Sykes Q4 net rises, restates Q2 and Q3 results
Sykes Q4 net rises, restates Q2 and Q3 results
TAMPA, Fla., Feb 7 (Reuters) - Sykes Enterprises Inc.,
which provides technology services to business, Monday posted
lower-than-expected 1999 fourth-quarter profits and forecast
disappointing earnings for 2000.
The company also announced revised results for the 1999
second and third quarters that were down sharply from the
original figures.
Shares of Sykes <SYKE.O> were off 3-5/8 at 14-5/16 at
midday on the Nasdaq stock market.
Fourth-quarter net income was $7.4 million, or 17 cents per
diluted share, excluding charges, the company said. Wall Street
had expected 21 cents per share, according to First
Call/Thomson Financial.
In the 1998 fourth quarter Sykes earned $11.9 million, or
28 cents per diluted share, excluding charges.
Fourth-quarter revenues rose to $163.6 million from $142.4
million a year earlier.
In the quarter, Sykes had special charge that included a
one-time, acquisition-related charge of $1.4 million, as well
as an additional charge of $7.3 million. The company also had a
fourth quarter severance charge of $500,000, as well as a $6.0
million charge.
The company did not immediately return calls to clarify
what these charges were related to.
Chairman and Chief Executive John Sykes said the company
would be looking for "strategic alternatives" for its wholly
owned subsidiary SHPS Inc.
The Tampa, Fla.-based company said the restatement of its
second and third quarter results stemmed from delayed revenues
in connection with certain software and service contracts.
In light of the restatement, the company now expects 2000
earnings at about $1.10 per share on revenues of about $735
million. Analysts were expecting earnings of $1.53 per share,
according to First Call.
Second quarter net income was restated as $4.0 million, or
9 cents per diluted share, from $11.5 million, or 27 cents a
share. Revenues were restated to $134.1 million from $146.1
million.
Third quarter net income was restated as $4.3 million, or
10 cents per diluted share, from $14.1 million, or 33 cents per
share. Revenues were revised to $141.0 million from $161.0
million.
((--New York Technology Desk 212/859.1860))
REUTERS
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| To: John Ritter who wrote (28) | 2/7/2000 6:22:00 PM | | From: Ken M | | | |
(REUTERS) RESEARCH ALERT - Sykes cut to market perform
RESEARCH ALERT - Sykes cut to market perform
NEW YORK, Feb 7 (Reuters) - Banc of America Securities
analyst Jim Janesky said Monday he lowered his rating on Sykes
Enterprises Inc. <SYKE.O> to market perform from strong buy.
-- shares of Sykes were off 3-3/8 trading at 14-9/16 on the
Nasdaq stock market.
-- Janesky said Sykes reported fourth quarter earnings of
17 cents per share and a fiscal 1999 EPS of 60 cents per share,
below Janesky's estimate of 20 cents per share for the quarter
and $1.03 for the year.
-- said earnings for the second and third quarter of 1999
have been restated to 9 cents from 27 cents per share and to 10
cents from 33 cents per share, respectively.
-- said the company is also giving new guidance for 2000 of
$1.10 per share.
-- said the company has decided to recognize all costs
related to pending contracts, but no revenues. The recognition
of costs, but not revenues defies the accounting logic of
matching revenues with expenses in any given period.
-- said there is no visibility for 2000. On the conference
call, management stated that, on advice of counsel, they are
unable to comment on performance in 1999.
-- said lawsuits could prevent the company from signing
pending contracts.
-- said the company previously said it was unable to
recognize revenues related to three contracts that were being
performed, but had not been signed. One contract was related to
a current client, Adobe Systems Inc. <ADBE.O>, which the
company said was signed on Monday. The other two contracts are
new.
-- said Sykes has indicated the lawsuits may complicate the
company's ability to sign the new contracts.
-- Janesky believes Sykes is still in discussions with its
auditors regarding appropriate revenue recognition principles,
which makes it more difficult to have confidence that future
earnings per share expectations won't be revised downward.
-- said although the stock currently trades at 13 times
Janesky's 2000 estimate of $1.10, he cannot say with sufficient
confidence that earnings estimates represent a trough for the
company.
(( -- New York Technology Desk 212/859.1860))
REUTERS
*** end of story *** |
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| To: Ken M who wrote (32) | 2/10/2000 1:57:00 PM | | From: Ken M | | | |
(COMTEX) B: Tampa, Fla., Call-Center Operator Revises Earnings Report
B: Tampa, Fla., Call-Center Operator Revises Earnings Report, Expectations
Feb. 8 (St. Petersburg Times/KRTBN)--TAMPA, Fla.--Confirming the fears
of investors and analysts, Sykes Enterprises Inc. restated its earnings
for 1999 and severely cut its expectations for 2000.
The Tampa operator of call centers made the changes grudgingly after
auditors questioned how the company recorded software revenue in some
service contracts.
Sykes' stock price tumbled 21 percent, or $3.683/4 cents, to $14.25
Monday, the third significant jolt in less than two weeks.
The value of Sykes' shares has been sliced by nearly three-quarters
since trading at a one-year high of $52.25 just three weeks ago. The
first blow came Jan. 25 when Sykes warned that it would miss
fourth-quarter earnings projections by at least 40 percent. The stock
plunged more than 50 percent. Then on Feb. 1, shares fell another 33
percent after the company delayed the year-end earnings report because
the auditors had not finished reviewing financial statements.
And the outlook is not good for a quick recovery. During a somber
conference call Monday with investors and analysts, the company said it
still has not resolved its accounting problems with auditors Ernst &
Young LLC. The call, in fact, left analysts with more questions than
answers.
"It's very difficult at this point to get your arms around everything
that happened," said Steve Toomey, an analyst with George K. Baum & Co.
in Kansas City.
For John Sykes, chairman and chief executive, the pain of the sudden
turnabout was evident in his voice during the conference call. "The
past few weeks have been the toughest in the history of our company,"
he said.
But the problems date back to the second quarter of 1999. That's when
Sykes started offering technical support over the Internet. It was a
radical change for a company that had always provided support to
customers of companies, such as Microsoft Corp. and Apple Computer
Inc., through a network of call centers around the globe. The company
answers more than 250,000 questions a day.
Sykes developed software called AnswerTeam that allowed customers to
diagnose computer problems on their desktops. The company bundled the
software with its traditional service in some contracts that were up to
five years in length.
The company recognized the revenues from the software immediately
after signing a contract. Meanwhile, the revenue from the technical
support over the phone would be realized throughout the length of the
contract.
But Ernst & Young, during its review of year-end results, disputed
Sykes' accounting of the software revenue. The auditor told the company
that such revenue should be prorated over the term of a contract.
So the company removed about $32-million from its 1999 revenues. In
the second quarter, the restated results are as follows: Net income of
$4-million, or 9 cents a share, on revenue of $134.1-million. Sykes had
previously reported net income of $11.5-million, or 27 cents a share,
on revenue of $146.1-million.
The revised third-quarter net income is $4.3-million, or 10 cents a
share, on revenue of $141-million. The company previously reported net
income of $14.1-million, or 33 cents a share, on revenue of
$161-million.
In the fourth quarter ended Dec. 31, earnings before a onetime charge
was $7.4-million, or 17 cents a share. Sykes took a pretax charge of
$6-million to write off technology that it bought from another company,
which lowered net income to $3.7-million, or 9 cents a share. Revenue
rose 15 percent to $163.6-million from $142.4-million.
A year earlier, in the fourth quarter of 1998, Sykes reported net
income of $3.2-million, or 7 cents a share after onetime charges.
Although the company followed the auditor's advice and restated
earnings, it did so reluctantly. The Ernst & Young accountants "are
making interpretations based upon what they know," Sykes said. "Now, I
don't fault them for that. I just don't agree with them."
Sykes did not comment beyond the conference call. A phone call to
Ernst & Young's office in Tampa was not returned.
But the lack of certainty about how Sykes will recognize software
revenue in the future left analysts and investors baffled. They have
little confidence in the company's forecast for 2000. The company said
it expects revenue of $735-million and earnings per share of $1.10 a
share, 31 percent below its original forecast of $1.59 a share. Sykes
also added that it will hire an investment bank to review options for
its poorly performing health-care unit, SHPS Inc.
In 1999, Sykes earned 60 cents a share on revenues of $575-million
after restating its results and before onetime charges.
During the call, analysts tried to clarify the accounting issues. But
the company refused to answer questions about 1999 results.
Sykes apologized several times for the lack of candor, explaining that
he was following orders of the company's lawyers. The company is
defending several shareholder lawsuits filed last week, accusing the
company and some of its senior officers of issuing misleading
statements regarding the financial condition of Sykes.
Several analysts and investors chastised the management for its
evasiveness. "I must humbly suggest to you that your lawyers' advice
about not talking about 1999 is extremely detrimental to the
credibility of a company," said James Ruf, a money manager in
Connecticut.
Analyst John Mahoney said the call was "pretty grisly." But he said he
does not think the company intentionally attempted or committed any
accounting fraud.
Still, he and other analysts said the troubles of the past few weeks
highlighted the need for Sykes management to put better controls in
place. "The company was unfamiliar as to how certain rules and
practices worked within that segment," Toomey said. "You've got to make
sure you truly understand what's going on."
By Ameet Sachdev
-0-
To see more of the St. Petersburg Times, or to subscribe to the
newspaper, go to sptimes.com
(c) 2000, St. Petersburg Times, Fla. Distributed by Knight
Ridder/Tribune Business News. SYKE, MSFT, AAPL,
END!A20?PT-CALL-CENTER
*** end of story *** |
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| To: Arrow Hd. who wrote (36) | 8/2/2000 7:17:57 PM | | From: John Ritter | | | | | The stock seems strong, I expect SYKE will go back through $22, but have lowed my target to $25, didn't like that last downdraft, eventually the stock should get back to $50 if you want to hold it for a couple years...but you never know, it is all a gamble...of further surprises... |
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