Business software and services provider Sapient
Fourth-quarter revenue increased 37% over the year before, though it led to a GAAP loss of $0.01 per share. Sapient was also rewriting its second-quarter numbers to show that income from continuing operations dropped by $1.2 million on an increased income tax provision. The third quarter remained unchanged despite a $400,000 operating loss, because it had to revise its income tax provision there, too.
So while Sapient says it realized $2 million in operating income in the fourth quarter, don't hold your breath that this won't change. The investigation into its stock-option backdating scandal continues, and all of the numbers it reports -- even those that are revised and updated -- remain subject to change.
Two months ago, I cautioned investors against taking a position in Sapient because of its precarious financial condition. While it reported decent 17% growth in Europe and 9% growth in North America in the third quarter, it didn't bother to break out such figures this time. Is that because sales are faltering? Since there's a new management team in place at Sapient, I'm more inclined to believe their suggestions that "clients are responding well" to the services the company is offering, but the $2 million preliminary operating income is still two-thirds less than what it was last year.
Even at $6 a share, Sapient remains richly valued compared to competitors like Accenture
Until Sapient is done unraveling the monkey business with its books, and until its numbers are no longer subject to change, money placed here is a gamble, not an investment.
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Fool contributor Rich Duprey does not own any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.