BearingPoint reports lower profits

7 May 2004

Big Five IT consultancy BearingPoint has reported a decrease in profitability for its first quarter. The company said that its profits fell by more than 50pc due to higher contract expenses.

BearingPoint’s first-quarter profit was US$1.6m, or 1 cent a share, down from US$4.1m, or 2 cents a share, during the same quarter. Analysts had expected a profit of 4 cents a share.

BearingPoint, formerly known as KPMG Consulting, said revenue rose 5pc to US$861m, largely from growth in its North America operations.

However, BearingPoint’s outlook for revenue of US$840m to US$860m in second quarter revenues beat expectations among analysts for US$818.8m.

“Our first quarter results show a solid start to 2004 with year-over-year revenue growth in many of our business units,” commented Rand Blazer, chairman and chief executive officer. “We remain focused on growth and improvement in the key operating metrics of our business.”

Bob Falcone, executive vice president and chief financial officer added: “During the quarter, utilisation of our billable staff is up on a year-over-year basis. Going forward, our focus is on continuing our utilisation improvement, reducing our reliance on subcontractors and holding our billing rates steady.”

By John Kennedy