Sykes Enterprises Shares Plunge After Earnings Are Delayed

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For Fair Use......... Tampa, Florida, Feb. 1 (Bloomberg) -- Sykes Enterprises Inc. shares plunged as much as 41 percent after the operator of technical-support centers said it's delaying the release of fourth- quarter earnings for about seven days because its audit is incomplete.

The shares fell 8 1/16, or 29 percent, to 19 5/8 in early trading. It was the biggest percentage decline in U.S. markets. Earlier, the shares touched 16 1/4.

Sykes said Jan. 25 it expected to report fourth-quarter profit of 20 cents to 22 cents a share, well below the 37-cent average forecast of analysts polled by First Call/Thomson Financial. Its shares fell 51 percent that day.

Sykes runs 38 call centers that provide technical support for customers of companies such as Microsoft Corp., Apple Computer Inc. and International Business Machines Corp.

The Tampa, Florida-based company also said it's canceling its previously scheduled conference call.

Question.....At the risk of affecting your stock value why would anyone delay earnings report...........hmmmmmmmmm

-- kevin (innxxs@yahoo.com), February 01, 2000

Answers

There's more to the story ...

TAMPA Jan. 25 (Bloomberg) -- Sykes Enterprises Inc. shares fell 51 percent after the operator of call centers for computer makers and Internet service providers Said it would miss analysts' fourth-quarter earnings estimates.

The shares fell 24 1/4 to a 52-week closing low of 23 on the Nasdaq National Market, reducing Sykes' market value by about $1 billion, to $974 million. Tampa, Florida-based Sykes had the biggest percentage decline of any stock in U.S. markets.

Sykes warned that it expects to report fourth-quarter profit of 20 cents to 22 cents a share, less than the 37-cent average forecast of analysts polled by First Call/Thomson Financial. In the year-earlier quarter, it earned 28 cents a share. Sykes also said it expects fourth-quarter revenue of $160 million to $162 million, up from $142 million a year earlier.

``This is very disappointing, there is no doubt about it, and that's why the stock has taken such a hit,' said Stephen Shook, an analyst at Wachovia Securities. ``The stock isn't worth half of what it was. This thing is a little overdone.'

Two other analysts cut their ratings on Sykes today. Shook said he downgraded the stock to ``neutral' from ``strong buy' last week because he thought the shares, which had risen 61 percent in the past year as of yesterday, wouldn't gain more.

Sykes runs 38 call centers that provide technical support for customers of companies such as Microsoft Corp., Apple Computer Inc. and International Business Machines Corp.

Surprised by Shortfall

Sykes blamed foreign-currency transactions, training and development costs for new contracts, and a unit that didn't meet expectations. The earnings shortfall would be the company's first since it sold shares to the public in 1996.

``We're extremely disappointed in the need to recast our numbers for the fourth quarter,' said Sykes Chairman and Chief Executive John H. Sykes in a teleconference. ``We were surprised at the magnitude of this situation."

The company expects to earn 40 cents a share in the first quarter, 10 cents more than the average forecast of seven analysts polled by First Call, as it expects to get about $10 million from delayed contracts, said Chief Financial Officer Scott Bendert. He said Sykes this year expects to earn as much as $1.59, or 8 cents more than the First Call average forecast.

Fourth-quarter revenue was reduced by $4 million because of the euro's fall against the dollar, which made currency conversion more expensive, and another $4 million because of problems at Sykes' SHPS Inc. unit, Shook said. SHPS runs call centers for health-care providers, he said.

Sykes officials didn't provide more information in a statement or answer questions about reasons for the earnings shortfall during its teleconference. Company officials didn't return phone calls seeking comment.

The company has 14,000 workers in the U.S., Canada, Europe, Africa and Central America. Its 1998 revenue was $469.5 million.

-- Cheryl (Transplant@Oregon.com), February 01, 2000.


Sykes Enterprises Is Sued by Shareholder After Stock Plunges 60% In the Past Week, Announces Berman, DeValerio & Pease LLP

BOSTON, Feb. 1 /PRNewswire/ -- Berman, DeValerio & Pease LLP, a law firm specializing in representing shareholders in class action lawsuits, issues the following press release:

Sykes Enterprises, Inc. (Nasdaq: SYKE) was named in a shareholder class action filed in the United States District Court for the Middle District of Florida. The lawsuit, which seeks class action status, is brought on behalf of investors who purchased Sykes Enterprises common stock during the period April 26, 1999 through January 31, 2000 for violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

The action charges that Sykes Enterprises and certain individual defendants misled investors concerning Sykes' expected 1999 fourth quarter results and that Sykes' financial statements were not prepared in accordance with Generally Accepted Accounting Principles. Sykes Enterprises common stock price plummeted approximately 60% since announcing it would not meet fourth quarter results and that it would delay the release of its financial results for 1999.

-- Cheryl (Transplant@Oregon.com), February 01, 2000.


VERY, VERY STRANGE ... WHAT'S GOING ON. Since 1996 everything has gone smoothly, and now ... the "company's 1999 audit has unexpectedly not been completed to a level that is appropriate"??? FYI: The stock price now is the same as it was in '97. It is oversold.

From last year ...

OCT 15: John H. Sykes, Chairman and Chief Executive Officer stated, "The third quarter of 1999 marks the 15th consecutive quarter, and every quarter that Sykes has been public, that we have delivered earnings that have either met or exceeded the consensus expectations. These results were achieved based upon our considerable strength and growth in technical support, including our internet and e-commerce services which now totals thirty-eight customers, and were achieved despite weaker foreign currencies."

FEB 1: TAMPA, Fla., Feb. 1 /PRNewswire/ -- Sykes Enterprises, Incorporated ("Sykes") (Nasdaq: SYKE), a global leader in providing vertically integrated, technology-based solutions worldwide, today announced that it is delaying for approximately seven (7) days the release of its fourth quarter and year end results. From information received today from the Company's external auditors, the status of the Company's 1999 audit has unexpectedly not been completed to a level that is appropriate for the release of fourth quarter and year end results.

... Sykes blamed foreign-currency transactions, training and development costs for new contracts, and a unit that didn't meet expectations. The earnings shortfall would be the company's first since it sold shares to the public in 1996.

``We're extremely disappointed in the need to recast our numbers for the fourth quarter,' said Sykes Chairman and Chief Executive John H. Sykes in a teleconference. ``We were surprised at the magnitude of this situation."

My gut feel is that earnings are better than what is being reflected. Maybe not the greatest, but possibly better than is being reflected. There could be problems with accounting software which is adversely affecting year-end results. I think there are a lot of manual work-arounds going on right now, with people re-working spreadsheets with actual figures. IMHO that's why 4th quarter results are being delayed. We'll see in a week or two.

-- Cheryl (Transplant@Oregon.com), February 01, 2000.


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