BearingPoint revenues dip

27 Feb 2004

Proving that the troubles of Big Five IT consultancy players are far from over, BearingPoint, which spun off from KPMG last year, reported a preliminary net loss for the quarter ended 31 December, that included a hefty goodwill impairment charge. Revenue at BearingPoint slipped 1.9pc to US$792.1m from US$807.6m a year earlier.

BearingPoint said its preliminary net loss came to US$117m, or 60 cents a share. That compares with year-earlier net income of US$16.4m, or nine cents a share.

BearingPoint, which on Feb. 2 changed its fiscal-year end to 31 December from 30 June, is reporting results for the second quarter of a six-month transitional period. The results for the latest period formerly would have been recorded under the company’s fiscal second quarter.

The company said the preliminary results are subject to audit procedures and possible final reconciliations and adjustments. It expects to report its final results for the quarter ended 31 December on or around 16 April.

The latest quarter includes an estimated goodwill impairment charge of about US$120m related to the reevaluation of goodwill at its EMEA business amid a “challenging economic environment” in Europe. The company also took a charge of US$2m for leases and facilities. Excluding those items, BearingPoint would have posted operating earnings of ” roughly six cents a share” for the latest quarter. The company said the impairment charge could range between US$100m and US$ 140m.

In Ireland, BearingPoint’s performance should be bolstered by the fact that the company emerged as the winner of the €15m contract to build the Irish Government’s Public Services Broker, which will be the lynchpin of e-government interaction between the citizen and the State.

By John Kennedy