Convergys Posts Narrower 3Q Loss, Gives Upbeat 4Q Earns View

Convergys Corp.'s (CVG) posted a narrower third-quarter loss on smaller write-downs, as well as new business signings and continuing solid margins in its customer-management business.

The provider of integrated billing, employee care and customer-care services also forecast fourth-quarter earnings, excluding items, of at least 30 cents a share on revenue of $650 million to $670 million. Analysts were expecting earnings of 26 cents a share on revenue of $667 million.

Business-services providers have been hurt by an overall pullback in corporate spending as the economy languishes.

Convergys said its third-quarter loss narrowed to $86 million, or 70 cents a share, from $140 million, or $1.15 a share. Excluding charges, including a year-ago $272.9 million charge related to human resources management contracts, earnings fell to 27 cents a share from 29 cents a share.

Revenue rose 13% to $765.4 million, including $106 million in deferred revenue from an HR-unit contract.

Analysts polled by Thomson Reuters were expecting earnings, excluding items, of 23 cents a share on revenue of $653 million.

Customer-management profit, excluding items, rose 61% on a 2% revenue rise and sharply higher margins. The much-smaller information-management segment, which offers bill processing services and software to telecommunications companies, had a 47% earnings drop as revenue fell 26%.

Convergys shares closed at $10.66 and didn't trade premarket. The stock has surged 66% this year.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; [e-mail]