Convergys narrows loss but beats views, stock up

Convergys narrows loss, stock jumps as outsourcing provider beats views

• On 4:52 pm EDT, Tuesday October 27, 2009

CINCINNATI (AP) -- Convergys Corp., an outsourcing provider, narrowed its loss in the third quarter as the renegotiation of a large contract lifted revenue.

The company said Tuesday its net loss was $86 million, or 70 cents per share, versus a loss of $140 million, or $1.15 per share, in the year-ago period.

Excluding one-time charges, the company said it would have earned 27 cents per share.

Convergys said it absorbed $131 million in charges in the quarter for restructuring and changes in one large human resources management contract. The changes to that contract had the dual effect of lifting revenue, because Convergys counted revenue it already received from the contract but had planned to record later, and depressing earnings because of other charges associated with the change.

The year-ago quarter's loss was also bigger because of higher impairment charges.

Sales rose to $765.4 million from $676.2 million a year ago.

Analysts were expecting profit of 23 cents per share, excluding items, on sales of $652.9 million.

The company said it expects fourth-quarter revenue of $650 million to $670 million, in line with analysts' forecasts, and profit of more than 30 cents per share, excluding one-time items, which is ahead of analysts' forecasts.

The stock rose 35 cents, or 3.3 percent, to close Tuesday at $11.01.

Buzz up!