DOW JONES NEWSWIRES
Convergys Corp. (CVG) said first-quarter net income fell 22% on
a slump in sales at its information-management business.
In December, Moody's Investors Service cut Covergys' ratings to
junk, saying its human-resources management business was weak and
it needed to sign big contracts.
President and Chief Executive David Dougherty said the company's
customer-management segment was a source of profitability. He added
the company was expanding its delivery footprint.
The provider of integrated billing, employee care and
customer-care services posted net income of $28 million, or 23
cents a share, from $35.9 million, or 28 cents a share, a year
earlier. The previous year's results included $14.1 million in
restructuring charges and $7.1 million in retirement-related
expenses.
Revenue decreased 3% to $694.7 million.
Analysts surveyed by Thomson Reuters expected 20 cents a share
in earnings on $695 million in revenue.
Gross margin rose to 36.2% from 234.1.
Revenue from the company's largest segment, customer management,
rose 9% as operating margins rose to 7.8% from 4.6%. Sales at its
information-management business fell 34% on project completions and
expected client migrations in North America. Operating margins fell
to 11.6% from 18.1% last year.
The company affirmed its full-year earnings guidance from
January of 90 cents to $1.10 a share.
The stock closed Monday at $9.67 and wasn't active premarket.
Convergys' stock price fell to an all-time low in November but has
since doubled in value.
-By Joan E. Solsman and Kerry E. Grace, Dow Jones Newswires;
201-938-5500; joan.solsman@dowjones.com
