Keane posts Q1 revenues of $221 million

New Delhi: Keane (www.keane.com), a leading business and information technology consulting firm, has reported revenues and earnings for the first quarter ended 31 March 2002.

Revenues for the first quarter of 2002 were $221.3 million, an increase of 9 per cent, from $203.2 million in the first quarter of 2001, excluding $5.2 million in revenues generated in the first quarter of 2001 from the company’s divested help-desk operation.

The net income for the first quarter of 2002 was $5.6 million, compared with $7.3 million in net income for the first quarter of 2001, prior to the net benefit from the sale of the company’s help-desk operation and write-off of certain equity investments.

“We feel very good about Keane’s market positioning. Though the economy and technology spending remain depressed, we have capitalised on this environment by making some proactive moves that we believe will add to our long-term per-share value,” says Keane president and CEO Brian Keane.

“We have increased critical mass and gained hundreds of new customers through the Metro acquisition, added a robust offshore delivery capability with two SEI CMM Level 5 assessed facilities in India, and further strengthened our ADM outsourcing capabilities. These moves improve Keane’s positioning and operating leverage to capitalise on an economic recovery,” he says.

“During the first quarter, Keane continued to benefit from relatively stable revenues in less-cyclical sectors such as outsourcing, government, and healthcare, which helped generate solid first quarter financial results on the high end of both our top- and bottom-line guidance,” says Keane.

Keane India managing director Parmindar S Miglani is upbeat about the consistent grand performance of Keane worldwide. “At Keane India, we look forward to enhancing the service commitments of Keane through our state-of-the-art, built-up advanced technology centres. We are geared to buttress Keane’s value-proposition in the global application-outsourcing marketplace. Our offshore component, through cost-effective technology solutions, will provide greater impetus to Keane’s service lines to its customers in the application development and outsourcing arena.”

“Keane reported sequential revenue increases in each of our plan, build and manage service lines during the first quarter,” says Keane senior vice-president (finance) and CFO John Leahy. “This represents the first sequential increase in plan and build revenue in over a year. These results reflect a stabilisation of our more cyclical plan and build businesses, but we still remain cautious about macroeconomic conditions and trends in technology spending.”

The strength of Keane’s manage bookings is due primarily to the company’s previously announced $500-million ADM outsourcing contract with PacifiCare Health Systems. The first quarter revenues do not reflect any material contribution from this deal, which began to ramp late in the quarter.

The company reported revenues from Keane’s ADM outsourcing service of approximately $97 million during the first quarter of 2002, up sequentially from $95 million in the fourth quarter of 2001. Keane’s ADM outsourcing revenues are reported within the company’s manage business.

Based on the current conditions and its cautious view of the economic recovery, the company estimates that revenues for the second quarter of 2002 will be in the range of $225 to $235 million, and cash EPS in the range of $0.10 to $0.12. Due to continued economic uncertainty, the company is not at this time comfortable providing guidance with respect to financial results for the full year 2002.