Reports steep revenue decline
DiamondCluster International reported Thursday a steep revenue decline and losses for the third quarter.
DiamondCluster CEO Mel Bergstein told analysts during an earnings conference call that the e-services company didn't perform as well as anticipated because of a host of factors, including a 39 percent drop in European revenue, lost business in the United States tied to the events of Sept. 11, an uncertain economy and sharp decline in demand.
"Obviously, we are disappointed," Bergstein said. "But we believe the worst is behind us."
For its third quarter ended Dec. 31, DiamondCluster reported a loss, before charges, of $10 million, or 16 cents per share, on sales of $36.2 million. That compares with income, before charges, of $13.5 million, or 30 cents per share, on sales of $75.4 million for the same quarter of 2000.
Earnings met Wall Streets' estimates, as reported by Thomson Financial/First Call.
Meanwhile, when considering charges including $15.5 million related to personnel reductions and other restructuring cost cuts during its third quarter, DiamondCluster reported a loss of $43.1 million, or $1.39 per share.
Bergstein, however, told analysts he is optimistic about the March quarter, based on Jan. 2002 trends.
"We are hearing and seeing early signs that business in North America is slowly resuming," Bergstein said.
He also said European budgets appear to be opening up in spite of economic uncertainty and a focus on wireless services and solutions overseas is gaining steam. The company ended the third quarter with 958 billable professionals, compared with 1,063 for the year-earlier period.
Bergstein said he expects revenue to be anywhere from flat to up 10 percent for the March quarter.