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 company Skyes Enterprises
So what: Sykes' results simply went from ugly to uglier! For the quarter, the company earned an adjusted profit of $0.27 on revenue of $276.2 million which compares to the $0.28 and $291.7 million expected by analysts. An ongoing corporate restructuring, unfavorable foreign currency translation, and higher tax rates are hurting its earning potential. Sykes also recently decided to exit its business in South Africa and Ireland, sell its business in Spain, and restructure its operations in the Netherlands and United States.
Now what: The pain isn't quite done yet -- I did promise you fiscal 2012 guidance. Sykes is forecasting full-year EPS of $1.10 to $1.20, on an adjusted basis, on sales of $1.1 billion to $1.11 billion. This compares to Wall Street's expectations for a profit of $1.47 on revenue of $1.24 billion. In short, it was an all-around terrible report for Sykes, and it doesn't look like the company's going to remedy its troubles anytime soon. While not expensive by any means, I'm passing on Sykes until it has better business clarity.
Craving more input? Start by adding Sykes Enterprises to your free and personalized watchlist so you can keep up on the latest news with the company.
