CompuCom Records Solid Quarter, Year

For the 12 months ended Dec. 31, the Dallas-based systems integrator recorded revenue of $1.5 billion, down from $1.6 billion in 2002. Net income for 2003 was $13.2 million, compared with $18.3 million for the year-earlier period, excluding the cumulative effect of a change in account principle for negative goodwill. The amount of revenue generated from services was approximately $300 million in both years, or about 20 percent of total revenue.

"Throughout 2003, we continued to execute our steady shift to a more service-centric organization, with service representing nearly 53 percent of our total gross margin dollars for the year, up 3.5 points from a year ago," said CompuCom CEO Ed Coleman in a prepared statement. "This is the first time service gross margin dollars have exceeded 50 percent on a full-year basis."

During an earnings call with analysts, however, Coleman said services gross margin dollars actually were off slightly during the fourth quarter 2003, which he attributed to a higher mix of services focused on software testing and for government accounts.

For the fourth quarter, CompuCom's net income was $4.4 million, off from $5.4 million. Revenue for the three-month period was $416.4 million, up 3.1 percent on a year-over-year basis.

id
unit-1659132512259
type
Sponsored post

Coleman attributed CompuCom's "solid" fourth quarter to improved software sales, which had declined in the third quarter. Sales of Microsoft and IBM offerings were an especially significant factor, he said. Sales of commercial hardware products, particularly laptops and servers, also grew drew the period.

For the quarter and year ahead, Coleman said he expects incremental improvements in overall demand. He believes by March the industry, and CompuCom, will have a better picture of how the year will progress.

CompuCom's guidance for the first quarter suggests the systems integrator will have first-quarter revenue in the range of $330 million to $340 million, Coleman confirmed in answer to an analyst's question.

"We're all looking forward to getting off and running and having a very strong 2004," he said.