Scient Drops on Q3 Loss

Scient Corp. (Nasdaq: SCNT) was down0.062 at 3.375 early Thursday after the Internet consultant reportedquarterly earnings that were in line with its lowered expectations.

Revenue for the third quarter ended December 31st totaled US$79.8 million,up 87 percent from a year earlier but 22 percent below the precedingquarter, because of a slowdown in demand for Internet consulting services.

The company reported a loss before restructuring and other charges of $12.7million, or 13 cents per fully diluted share, compared with a pro formaprofit of $5.7 million, or 7 cents, in the prior quarter and a loss of$300,000, or breakeven per share, in the year-earlier quarter.

During the quarter, the company laid off 450 people and closed its officesin California’s Silicon Valley and Austin, Texas. The restructuring resultedin a pretax charge of $47.2 million in the latest quarter.

“Although our results were impacted by the broad-based slowdown in demand,we continue to successfully expand our blue-chip client base,” said chairmanand chief executive officer Bob Howe. “Our client retention remains strong,and we continue to experience robust growth internationally.”

Chief financial officer Bill Kurtz said the company expects revenue of $50million to $55 million for the quarter ending in March, with a pro formaoperating loss of $6 million to $10 million, or 6 to 10 cents per share. Hedeclined to provide guidance beyond the current quarter, citing the currentrestructuring and “lower visibility.”

The Internet sector as a whole, and consulting companies in particular, arestill in a down market.

In December, Scient warned that thequarter’s results would be weak, saying a “broad-based economicslowdown” caused many clients to cut back on spending, with largercompanies delaying projects and smaller ones unable to raise money.

Scient shares are down from a 52-week high of 133.75.

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