Sykes Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of outsourcing specialist Sykes Enterprises (Nasdaq: SYKE  ) jumped more than 18% in intraday trading as the company disclosed that third-quarter results will look better than previously reported.

So what: The company, which provides outsourced customer care for companies like AT&T (NYSE: T  ) , said that its third-quarter revenue will come in between $304 million and $306 million, above the $296 million-to-$301 million range that it gave in August. Earnings-per-share estimates were also bumped up, with the midpoint of the new range at $0.26 versus $0.20 in August's outlook.

Now what: The business process outsourcing (BPO) market is a hotly competitive one, and Sykes not only has to match up with companies' in-house operations, but fellow specialists like APAC Customer Services (Nasdaq: APAC  ) and the BPO arms of heavyweights like Accenture (NYSE: ACN  ) . However, the bump in guidance may suggest that the company is bouncing back from the recession-induced slump quicker than management had expected. Whether this is a sign that customers are looking for new ways to save money or are simply more willing to open up their wallets for services, it would seem that something is going right for Sykes. As for investing in Sykes' stock, long-term investors may want to wait until some of the current jubilation dies down.

Interested in more info on Sykes Enterprises? Add it to your watchlist by clicking here.

Accenture is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer owns shares of AT&T, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his Motley Fool CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed


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