Business service provider Sykes Enterprises Inc. (SYKE), Monday reported a drop in second quarter profit on impairment losses related to investment in SHPS, notwithstanding an increase in quarterly revenues. Revenues and earnings came in above Street estimates for the quarter. Sykes also raised its full year 2009 earnings guidance from its previous range, while providing its forecast for the third quarter.
For the second quarter, net income of Sykes Enterprises dropped to $14.35 million or $0.35 per share from $17.73 million or $0.43 per share in the prior year quarter.
On average, ten analysts polled by Thomson Reuters expected earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.
Quarterly results included an impairment loss on its investment in SHPS of $2.09 million or 1.0% of revenues.
Revenues rose 0.6% to $208.8 4million from $207.63 million in the same quarter a year ago, exceeding Street estimates of $201.90 million.
Revenues from the Americas segment rose 8.3% to $148.9 million or 71.3% of total revenues, while Europe, Middle East and Africa region decreased 14.5% to $59.9 million, representing 28.7% of total revenues
Operating margin for the quarter increased to 8.2% from 8.0%, on a comparable basis. Operating margins includes $1.6 million impairment loss on goodwill and intangibles related to the March 2005 acquisition of Kelly, Luttmer & Associates Ltd.
For the six-month period, net income decreased to $29.12 million or $0.72 per share from $33.44 million or $0.82 per share in the year-ago period. Revenues improved to $412.08 million from $411.35 million in the prior-year period.
Looking ahead to the third quarter, Sykes Enterprises said it expects earnings in the range of $0.31 to $0.34 per share, and revenues in the range of $210 million to $213 million. Analysts currently expects earnings of $0.31 per share on revenue of $208.25 million for the quarter.
For the full year 2009, the company now expects earnings in the range of $1.33 to $1.39 per share, and revenues in the range of $833 million to $837 million. The Street currently expects earnings of $1.26 per share on revenue of $829.76 million for the year.
Earlier, Sykes Enterprises expected full year earnings of $1.26 to $1.32 per share, and revenues of $831 million - $835 million.
SYKE closed Monday's regular trading at $20.17, up $0.27 or 1.36%, on a volume of 0.24 million shares. In after-hours, the stock further gained $1.03 or 5.l1%, to trade at $21.20.
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