UPDATE 1-PeopleSupport Q4 profit up, outlook disappoints
Reuters - March 06, 2008 6:11 PM ET
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PSPT Trade 11.40 -0.06
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March 6 (Reuters) - Business process outsourcing company PeopleSupport Inc (PSPT) posted a higher quarterly profit on gains from currency hedge, but guided 2008 results well below analysts' expectations, sending its shares down 21 percent.
"This decrease (in outlook) is primarily due to some slowdown, particularly among some technology clients, and some volume volatility in the near-term as existing clients react to an uncertain economy," Chief Financial Officer Caroline Rook said in a statement.
For the latest fourth quarter, the company said gains from the sale of its foreign currency forward contracts offset a fall in margins.
PeopleSupport, which performs a majority of its outsourcing work out of the Philippines, said its fourth-quarter operating margins fell to 0.7 percent, compared with 2.6 percent a year ago, due primarily to the appreciation of the Philippine Peso against the U.S. dollar.
It reported fourth-quarter earnings of $18.1 million, or 81 cents a share, which included a gain of $19.3 million in other income, on revenue of $35.8 million.
Analysts on average were expecting the company to earn 29 cents a share, before items, on revenue of $36.33 million, according to Reuters Estimates.
For 2008, the company expects earnings of 47 cents to 58 cents a share, on revenue of $162 million to $170 million. Analysts on average were expecting earnings of 72 cents a share, on revenue of $180.3 million.
Shares of the company were trading down 21 percent to $9.00 in trading after the bell, after closing at $11.40 on Nasdaq. (Reporting by Bijoy Koyitty in Bangalore; Editing by Jarshad Kakkrakandy)
