IT services vendor Perot Systems reported flat bottom-line growth during the first quarter, as it reported numbers for the first time since its flagship contract with UBS ended at the beginning of the year.
For the three months ending March 31, 2007, the Plano, Texas-based company reported net profit of $23m on revenue that grew 9% to $542m. The company’s operating profit margin fell to 5.8% from 6.5% in the year-ago quarter.
The company enjoyed strong growth in its healthcare and government sector divisions of 20% and 50% respectively, with the latter boosted by a $42m contribution from recent acquisition QSS. But revenue from its commercial solutions unit fell 28% to $118m, which was largely due to a fall in revenue following the expiration of its infrastructure outsourcing deal with UBS.
Perot Systems booked $65m in revenue and $0.07 in earnings per share from the UBS infrastructure deal in the first quarter of 2006, but made only $1m in the first three months of 2007. The company still has an applications management contract with the financial services giant.
President and CEO Peter Altabef heralded the company’s successful transition past the end of the UBS deal as a major accomplishment. However, Perot Systems’ investors were less impressed, sending shares down nearly 5% on the New York Stock Exchange to close at $17.01 on Tuesday.