DiamondCluster Revenue Dives In Q3

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While solution provider DiamondCluster International reported revenues for its third fiscal quarter that were less than half what it brought in last year, the company said it has seen the bottom of the downturn and expects things to improve this quarter.

The Chicago-based company on Thursday reported net revenue of $36.2 million for the third quarter, ended Dec. 31, down from $75.4 million for the same quarter last year. The company reported cash earnings per share loss of 16 cents per diluted share, compared to an income of 30 cents last year.

When taking amortization of goodwill into account, as well as a $15.5 million restructuring charge late last year, the company's net loss is $43.1 million, or $139 per diluted share. The restructuring charge came during the third quarter because of personnel reductions and other business realignment actions.

The good news, say company executives, is that the company appears to have hit bottom.

"While we are not yet ready to call the turn, we do believe we have seen the bottom," said DiamondCluster chairman and CEO Mel Bergstein, in a statement.

Bergstein said the company is optimistic about its March quarter and is seeing signs that business in North America is resuming.

"We also see European budgets opening up in the new year, though the economic uncertainty in Europe remains," he said.

DiamondCluster ended the quarter with a cash balance of $113.3 million and 958 client-serving professionals, compared with 1,063 on December 31, 2000.

The company expects net revenue for the next quarter to be flat to up 10 percent compared with the December quarter.

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