BPOUkraine » Perot Systems Reports Third Quarter 2008 Financial Results

Perot Systems Reports Third Quarter 2008 Financial Results

November 6, 2008 on 2:53 am | In Uncategorized |

PRNewswire-FirstCall
PLANO, Texas
(NYSE:PER)

PLANO, Texas, Nov. 4 /PRNewswire-FirstCall/ — Perot Systems Corporation (NYSE: PER) today announced third quarter 2008 financial results:

– Revenue was $711 million, an increase of 9% year-to-year over third quarter 2007 revenue of $655 million.

– Earnings per share (diluted) was $.25, an increase of 25% over third quarter 2007 earnings per share (diluted) of $.20.

– Operating profit margin expanded year-to-year by 40 basis points to 6.8% for the third quarter of 2008.

– New contract signings totaled $184 million for the third quarter of 2008, bringing the total value of new contracts signed during the past twelve months to $1.4 billion. Total bookings, which include contract renewals, totaled $473 million for the third quarter of 2008, bringing the total value of bookings during the past twelve months to $3.0 billion.

– Operating Cash Flow and Capital Expenditures for the third quarter of 2008 totaled $58 million and $11 million, respectively. Trailing twelve month Operating Cash Flow and Capital Expenditures were $221 million and $47 million, respectively.

– As of September 30, 2008, Cash totaled $246 million, and Debt totaled $185 million.

“We are pleased with our third quarter financial results and the progress we made building our business,” said Peter Altabef, president and CEO for Perot Systems. “We expanded revenue, profit margins, and earnings in the quarter. The sound business model and market position we have developed has continued to serve us well.”

Business Outlook

In October, Perot Systems signed a new seven-year contract extension with Catholic Healthcare West, extending the services relationship it originally signed in 2001. With this new contract, Perot Systems has signed contract extensions with two of its largest five clients during 2008.

As part of the new contract extension with CHW, Perot Systems will transition the third party contract management function back to the client. The pass-through revenue associated with this operation has grown significantly since the beginning of the original contract, producing $60 million of revenue during the first nine months of 2008. While this change will reduce revenue going forward, it will provide a profit margin benefit because the revenue was predominately pass-through expenses. From the third quarter of 2008 to the fourth quarter of 2008, this will result in a reduction to revenue of approximately $16 million, but will have an insignificant reduction to gross profit.

Other recent contract extension activity includes several successful Federal Government contract extensions. On one of these re-competed contracts, Perot Systems retained its core services, but moved from a prime contractor role to a subcontractor role to meet the agency’s requirements. This will result in a $5 million quarterly reduction in previous subcontractor revenue going from the third quarter of 2008 to the fourth quarter of 2008, but essentially no profit impact.

For the fourth quarter of 2008, Perot Systems expects normal seasonality to pressure revenue and earnings per share (diluted) by up to $4 million and $.02 per share, respectively. Including this effect, Perot Systems expects earnings per share (diluted) to range from $.23 to $.25.

Perot Systems expects revenue for the fourth quarter of 2008 to range from $680 million to $695 million, which includes the $25 million reduction to revenue associated with recent contract extensions and the effect of seasonality, as noted above.

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Perot Systems Reports Third Quarter 2008 Financial Results

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