Affiliated Computer Services, still evaluating the $6.1bn private buyout offer from its founder Darwin Deason and Cerberus Capital Management, reported a sharp rise on fiscal third-quarter earnings per share on mixed revenue numbers; the government business continues to surge for the outsourcer, but commercial sales were more sluggish.
Revenue for the company’s Q3 was up 10% overall to $1.44bn, right on Wall Street’s mark, according to Reuters Estimates. Commercial revenue increased 9%, to $858m, but sales were flat sequentially and up only 3% organically. Government revenue shot up 11% to $582m, and this growth was strong across all of ACS government offering, said COO Tom Burlin in a call with analysts Tuesday.
The company signed $703m in new business orders during the quarter, 80% on the BPO side and 20% coming from IT services.
Net income for the quarter was up 6% to $82m. EPS of $0.82 was well above last year’s $0.61 and two cents ahead of analysts’ forecasts. Operating income ticked up slightly to 11.3% from 10.5% last year.
In line with its guidance policy, ACS didn’t offer any window into its Q4 performance. Analysts are looking for EPS of $0.88 on $1.5bn in sales.
In related news, ACS announced in an SEC filing this week that it had paid former CEO Jeff Rich, who resigned in 2005, received $22.4m from the company in stock options repurchases and termination fees. Rich, along with his successor Mark King and CFO Warren Edwards, who both resigned last year, were all named in an internal investigation into shady stock options practices in November.
The company paid King more than $757,000 in compensation last year, and Edwards received more than $473,000, according to the SEC filing. But ACS said it didn’t give them any performance-based or severance payments in 2006.