Convergys 1Q Net Falls 22% On Slump In Information Management

   DOW JONES NEWSWIRES 
 

Convergys Corp. (CVG) said first-quarter net income fell 22% on a slump in sales at its information-management business.

In December, Moody's Investors Service cut Covergys' ratings to junk, saying its human-resources management business was weak and it needed to sign big contracts.

President and Chief Executive David Dougherty said the company's customer-management segment was a source of profitability. He added the company was expanding its delivery footprint.

The provider of integrated billing, employee care and customer-care services posted net income of $28 million, or 23 cents a share, from $35.9 million, or 28 cents a share, a year earlier. The previous year's results included $14.1 million in restructuring charges and $7.1 million in retirement-related expenses.

Revenue decreased 3% to $694.7 million.

Analysts surveyed by Thomson Reuters expected 20 cents a share in earnings on $695 million in revenue.

Gross margin rose to 36.2% from 234.1.

Revenue from the company's largest segment, customer management, rose 9% as operating margins rose to 7.8% from 4.6%. Sales at its information-management business fell 34% on project completions and expected client migrations in North America. Operating margins fell to 11.6% from 18.1% last year.

The company affirmed its full-year earnings guidance from January of 90 cents to $1.10 a share.

The stock closed Monday at $9.67 and wasn't active premarket. Convergys' stock price fell to an all-time low in November but has since doubled in value.

-By Joan E. Solsman and Kerry E. Grace, Dow Jones Newswires; 201-938-5500; [e-mail]