Solution Provider 500: Earnings Call10:00 AM EST Wed. May. 09, 2012
For several solution providers that have reported earnings in recent days, the numbers look good. Out of CRN's sampling of seven of the largest solution providers in North America, five saw revenue grow in the last quarter, compared with the same period in 2011. Some, but not all, of that growth was spectacular. Here's how CIBER, Cognizant, Datalink, Fiserv, PGi, RCM and SHI fared.
CIBER first quarter sales fell 5 percent from the same period in 2011, to $241 million. The North American division, which accounts for 49 percent of the solution provider's consolidated revenue, saw revenue decline 11 percent compared with 2011’s first quarter; however, sales did grow slightly from the fourth quarter 2011. According to documents filed with the SEC, CIBER plans to continue to invest in sales and marketing to drive revenue growth through the rest of the year.
The normally exuberant sales at Cognizant did not disappoint as revenue rose nearly 25 percent in the first quarter of 2012, up to $1.71 billion, compared with $1.37 billion in the year-ago quarter. However, because of slower demand entering into the second quarter, Cognizant revised guidance for the remainder of the year downward to at least 20% revenue growth for 2012. Still, 20 percent growth is more than healthy, and the solution provider's second quarter 2012 revenue is anticipated to be at least $1.79 billion.
Revenue at Datalink increased a whopping 39 percent to a record $119.1 million. Sales for the prior-year period were $85.7 million. The company credited the expansion of its data center product and services portfolio in fueling the company's growth. In the past 12 months, networking and server revenue rose from 9 percent to 16 percent of the product mix.
Fiserv saw healthy sales growth in the first quarter, with revenue rising from $1.05 billion in the year-prior quarter to $1.11 billion. The solution provider's payments segment increased $39 million, or 7 percent, during the first quarter of 2012 compared with the same period in 2011. In addition, sales from acquired companies, mainly CashEdge, totaled $15 million in the first quarter of 2012, positively impacting segment revenue growth by roughly 3 percent.
In the first quarter of 2012, PGi revenue increased 8.3 percent to $126.6 million, compared with $116.9 million in the first quarter of 2011. The solution provider is in the process of transitioning to a software-as-a-service model. PGi boosted the annual revenue run-rate from its iMeet and GlobalMeet products by more than 22 percent, as compared to the fourth quarter of 2011.
RCM reported revenue of $38.2 million for the 13-week period ended March 31, 2012, down slightly from $38.7 million for comparable prior year period. In addition, RCM had operating income of $1.8 million for the 13-week period ended March 31, 2012, compared with $2.1 million for the comparable prior year period. According to company's 10-K, the revenue decrease was primarily the result of the residual impact from subpar performance in RCM’s Information Technology segment in 2011. In addition, it stated that "the Company is cautious regarding expectations for the remainder of 2012 as the Company believes that any general economic or market recovery may be slow and/or tenuous."
SHI's first quarter 2012 revenue grew 13 percent from the first quarter in 2011, to $874 million. SHI's three-year-old SMB division led overall growth with a 78 percent increase in revenue year-over-year. Additionally, the legacy Enterprise and Public Sector division increased 4 percent.