Sapient Rises in Face of Analyst Disagreement

Amid conflicting analyst views of the company’s first-quarter results, Sapient (Nasdaq: SAPE) reversed anearly drop to trade up 96 U.S. cents to $13.20 at midmorning Friday.

The technology consulting company announced a loss for the firstquarter and reportedly warned of a weak second quarter as well. Analysts atWR Hambrecht, CIBC World Markets and Credit Suisse First Boston reportedlydowngraded the stock following the report, while First Union Securities wassaid to have raised its rating.

Sapient said that revenue for the quarter ended March 31st rose 9 percent fromthe same period last year, to $109.1 million.

The pro forma loss — whichexcludes amortization and charges for restructuring and other items –totaled $6.2 million, or 5 cents per share, compared with pro forma incomeof $12.7 million, or 10 cents.

The net loss totaled $48.3 million, or 39cents per share, compared with net income of $11.9 million, or 9 cents.

Latest-quarter results included a $47.3 million charge for a restructuringannounced in March that included a 20 percent workforce reduction andthe closing of the company’s office in Sydney, Australia.

The restructuring cost 720 employees their jobs, including 60 in Sydney. Someworkers at offices in the United States were also cut, though the companysaid it would continue to expand in Europe, where economic conditions werebetter.

“While we are satisfied that our results were in line with previousguidance, it is clearly a challenging market, and our financial performancereflects that,” said chief financial officer Edward Goldfinger.

Sapient officials reportedly told investors in a conference call thatbusiness continued to deteriorate in March, and second-quarter revenue willlikely total $90 million to $95 million, down from $125.8 million in theyear-earlier quarter. They reportedly predicted a pro forma loss of 4 to 6cents per share.

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