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Downturn for ICT Group
CRM outsourcing firm the ICT Group has reported a first quarter revenue drop to $108.7m from $115.2m in Q1 2007. Net loss for the 2008 first quarter was $1.0m, or $0.06 per diluted share.
Chairman and CEO John Brennan said that first quarter performance was in line with company expectations. 'More challenging economic conditions have caused clients to reduce the scope of certain programs. We were able to offset some of the decline in call volumes by new business wins from existing and new customers, and were encouraged by the continued strength of our international business units.'
In Q1 2008, 60% of work for US clients was produced at the firm's lower-priced, offshore facilities, compared with 40% in last year's first quarter and 58% in the fourth quarter of 2007. The firm says that this increase in the percentage of offshore production, principally in the Philippines, has increased the company's exposure to the effects of foreign currency fluctuations, and adds that had the foreign currency exchange rates remained in effect in 2008, pre-tax income would have increased by approximately $1.5m.
Domestic revenue of $68.9m in the first quarter declined year-on-year as a result of the shift of US production to lower-priced offshore facilities, cutbacks in market research programs, and a reduction in telesales call volumes for certain financial services clients.
International revenue increased to $39.8m, reflecting 'strong growth' in Canada, Mexico, and Australia. Services revenue totaled $83.0m, 5% below last year's levels, and accounted for 76% of total revenue for Q1 2008.
Brennan added that the firm has also been reducing its infrastructure costs to resemble those of its offshore business model, and believes that new business wins will offset any further potential declines in existing programs, leaving the group 'solidly positioned in the marketplace'.
Earnings per diluted share for the second quarter of 2008 are anticipated to be in the range of $0.02 to $0.05 on revenue of $110m to $113m, and full year 2008 earnings per diluted share to be in the range of $0.35 to $0.45 on revenue of $455m to $465m.
Web site: www.ictgroup.com .
Last month, the firm announced that it would be creating up to 200 new jobs at its contact centre in Sydney Nova Scotia, while it also posted a drop in Q4 results caused by restructuring costs.
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