Ness Technologies Ltd. (Nasdaq: NSTC; TASE: NSTC) today published its financial report for the third quarter of 2009. The IT services provider reported a drop in revenue and a collapse in net profit, and cut its guidance for the full year of 2009.
Ness posted $132.7 million revenue for the third quarter, 19% less than for the corresponding quarter of 2008 and 4% less than for the preceding quarter. The slump was an unpleasant surprise for investors, who had anticipated a recovery in the second half of the year, particularly in view of the optimism the management displayed in the financial report for the second quarter. The company also missed the analysts' consensus of $146 million revenue.
Ness attributed the drop in revenue to weaker than expected revenue in Europe, and added that 30% of the drop, amounting to $9.3 million, was due to conversion of non-dollar revenue.
GAAP based net profit plummeted 95% to $842,000 ($0.02 per share) for the third quarter from $16.1 million for the corresponding quarter. Non-GAAP net profit fell 65% to $3.3 million ($0.09 per share) for the third quarter. The analysts' consensus was earnings per share of $0.10.
Ness cut its 2009 full-year guidance to $540-550 million from $590-620 million. The analysts' consensus is $588.8 million. The company said the the revenue shortfall in the third quarter and anticipated pressure on revenue in the fourth quarter were both primarily attributable to the protracted and deep economic recession in Europe.
Ness also cut its 2009 non-GAAP earnings per share guidance to $0.36-0.40, down from $40-60. The analysts' consensus is $0.45.
Ness added that it expected to make a restructuring charge of $7-9 million.
Ness's share fell 19% at the opening on Nasdaq to $5.17, giving a market cap of $200 million. The share fell 7.8% on the TASE to NIS 22.91.
Published by Globes [online], Israel business news - www.globes-online.com - on November 3, 2009
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