KPMG Consulting Reports 98% Drop in Earnings
The financial reports for KPMG Consulting for the current quarter ending June 30, 2002 show a 19 percent drop in revenues and a 98 percent drop in net income. Revenues for the quarter are $582 million compared with $722 million for the same period last year. Net income for the quarter is $404,000 compared with $22 million for the same quarter last year. Excluding charges for equity investments and one-time charges, earnings per share remained steady at $.15, the same as last quarter.
For the fiscal year, KPMG Consulting reported a decline of 17 percent in revenues, from $2.85 billion for the prior year to $2.37 billion for the year ended June 30, 2002. Net income tumbled 176% from a profit of $34 million to a loss of $26 million for the year.
Stock prices have continued a four-month decline, closing recently at just over $10 per share.
"We continue to deliver financial results in line with the market's expectations," said Bob Lamb, Executive Vice President and Chief Financial Officer. "I am particularly pleased with the strength of our balance sheet, free cash flow generation and overall cash position of $200 million. Although no company can control the macro economic environment, KPMG Consulting is built on a solid business model, remains financially strong and has the financial resources needed to support our client commitments."
According to CEO Rand Blazer, the firm is committed to focusing on integrating recent acquisitions of several units of Andersen Business Consulting as well as KPMG International's German, Swiss, and Austrian consulting divisions. In addition, Mr. Blazer noted plans to boost company revenues by increasing the firm's managed services offerings. “We've already seen some key wins in this area and are targeting managed services to become 15 percent of our revenue over the next couple years," he said.
Mr. Blazer and Mr. Lamb have indicated they will comply with the new Securities and Exchange Commission ruling requiring officer certification of financial statements when the firm files its annual report in September. KPMG Consulting split from Big Four firm KPMG two years ago.