Thursday, Affiliated Computer Services, Inc. (ACS), a business process outsourcing and information technology services provider, reported an increase in profit for the second quarter primarily due to an increase in commercial segment revenue.
Affiliated Computer's second quarter net income increased to $96 million or $0.97 per share from $75.51 million or $0.77 per share in the comparable period a year-ago.
Adjusted net income for the quarter increased to $106.0 million or $1.07 per share from $83.0 million or $0.85 per share in the comparable quarter a year-ago.
On average, 9 analysts polled by Thomson Reuters expected the company to earn $0.99 per share for the quarter. Analysts' estimates typically exclude special items.
The Dallas, Texas-based company's revenues for the quarter increased to $1.66 billion from $1.61 billion a year-ago. Eight Wall Street analysts estimated revenues of $1.71 billion for the quarter.
Segment-wise, Commercial revenues, which contributed 61% towards total revenues grew by 5% to $1.009 billion from $963 million a year-ago. Government revenues, which contributed 39% to total revenue declined to $647 million from $649 million a year-ago.
The company said commercial signings represented 47% of new business signings and Government contributed 53%. From a service line perspective, business process outsourcing contributed 88% of new business signings and 12% were information technology outsourcing.
Total operating expenses for the quarter including the cost of revenues and other operating expenses increased to $1.48 billion from $1.43 billion a year-ago.
The company's cash balance was $825 million at December 31.
The company had reported a decline in its year-over-year first quarter profit on October 22, hurt mainly by transaction cost related to its proposed acquisition by Xerox Corp.
On September 27, 2009, ACS and Xerox Corporation executed an Agreement and Plan of Merger, which was amended on December 13, 2009 pursuant to which ACS would be acquired by Xerox. The agreement was approved by the Board of Directors and recommended by a special committee of independent directors and is subject to certain closing conditions, including approval of ACS and Xerox Corporation stockholders. Both companies have scheduled shareholders meetings for February 5, 2010.
The company said that due to its proposed merger with Xerox, it will not be updating prior financial guidance or providing financial guidance for the third quarter or fiscal year 2010.
Amongst others in the industry, Accenture plc reported a decline in its profit for the first quarter, hurt by a drop in quarterly revenues, reflecting weak performance from almost all its operating segments, amid weakness in the global economy.
For the six months ended December 31, Affiliated Computer's net income rose to $164.79 million or $1.67 per share from $159.15 million or $1.62 per share in the comparable period a year-ago.
Adjusted net income for the period increased to $199 million or $2.02 per share from $170.5 million or $1.74 per share in the year-ago period.
The company which employs approximately 78,000 people supporting client operations reaching more than 100 countries, reported year-to-date revenues that increased to $3.33 billion from $3.21 billion in the prior year period.
ACS closed Thursday's trade at $63.92, up $1.75 or 2.81%, on a volume of 2.13 million shares on the New York Stock Exchange. In after hours, the stock gained $0.12 or 0.19%. The stock has been moving in a range of $42.10-$65.09 in the past 52 weeks.
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