Solutions providers remain upbeat, but most integrators saw their shares decline last week amid hints that the Federal Reserve will raise interest rates later this year.
For the week ended Jan. 30, our Ziff Davis Channel Zone Stock Index slid 2.24 percent to 1183.32. Decliners outnumbered advancers 21 to 8, with one index member unchanged.
Despite the one-week slide, our index is up a healthy 6.79 percent since December 31.
Anecdotal evidence suggests that the IT recovery continues to bolster many solutions providers, distributors and integrators.
Avnet Inc. (AVT, +3.37 percent for the week) reported strong 2Q results on Jan. 28. Year-over-year quarterly revenue rose 9 percent to $2.55 billion and net income was $8.9 million, a dramatic improvement from a $58.7 million loss during the comparable quarter last year.
Chairman and CEO Roy Vallee notes that business conditions continue to improve for the distributor's Electronics Marketing (EM) and Technology Solutions (TS) groups. "Sales came in at the high end of our guidance as Technology Solutions had a very strong quarter, well ahead of expectations," says Vallee. "We are very encouraged by the strong EM book-to-bill for the quarter and the strength of shipments early in January 2004." Translation: business in the current quarter is off to a good start.
Meanwhile, DiamondCluster International Inc. (DTPI) delivered strong 3Q results last week, but the consulting firm's stock dipped 1.26 percent after rallying more than 100 percent over the past year. DiamondCluster's quarterly revenue rose 31 percent to $39.5 million and net income was $1 million, compared to a net loss of $20.9 million during the corresponding quarter last year. Annualized revenue per consultant topped $347,000, up sharply from $187,000 during Q3 last year. Investment brokerage Janney Montgomery Scott upgraded DiamondCluster shares to hold from sell.
Next page: The week's big losers
The week's biggest loser was Sapient Corp. (SAPE, -14.46 percent). The Cambridge, Mass.-based consulting firm announced a profit for its 4Q but investors were undererwhelmed. Year-over-year services revenue jumped 16 percent to $44.7 million, and net income more than doubled to $2.6 million from $1.0 million in 4Q 2002. Still, a one-time $1.4 million gain (involving an investment sale) accounted for most of the income improvement.
The week's other big decliner, Keane Inc. (KEA, -8.30 percent), announced customer wins with the North Carolina Department of State Treasurer, Medisys Health Network and The National Life Group. But the good news wasn't enough to settle questions about Keane's 4Q results, which the company is slated to announce on Feb. 11. Analysts expect the company's net income to be 11 cents per share, according to Earningswhispers.com. But there appears to be little optimism that Keane can beat the 11-cent-per-share target.
Watch for additional earnings results from Computer Sciences Corp (CSC, Feb. 11), Ciber Inc. (CBR, Feb. 12) and American Management Systems Inc. (AMSY, Feb. 19).
About this Column: The Ziff Davis Channel Zone Stock Index tracks 30 channel-related stocks on a weekly basis. We don't recommend buys, sells or holds. Rather, the index seeks to measure the channel's financial health. We launched the index on Oct. 24, 2003 with a value of 1000. Each stock in the index is equally weighted. For example, if one stock rises 5 percent and another falls 4 percent, the net result is a 1 percent gain.
Next page: How all 30 Stock Index companies performed
Hed: Stocks on the Rise
|
Company
|
Symbol
|
Jan. 30
|
One Week
|
Web
|
|
Accenture Ltd.
|
ACN
|
$ 23.67
|
-1.78%
|
www.accenture.com
|
|
Acxiom Corp.
|
ACXM
|
$ 19.03
|
0.69%
|
www.acxiom.com
|
|
Affiliated Computer Services Inc.
|
ACS
|
$ 55.45
|
1.72%
|
www.acs-inc.com
|
|
Agilysys Inc.
|
AGYS
|
$ 13.10
|
-1.21%
|
www.agilysys.com
|
|
American Management Systems Inc.
|
AMSY
|
$ 16.58
|
-1.89%
|
www.ams.com
|
|
Arrow Electronics Inc.
|
ARW
|
$ 26.76
|
1.44%
|
www.arrow.com
|
|
Avnet Inc.
|
AVT
|
$ 26.35
|
3.37%
|
www.avnet.com
|
|
CDW Corp.
|
CDWC
|
$ 67.94
|
-0.38%
|
www.cdw.com
|
|
Ciber Inc.
|
CBR
|
$ 9.26
|
-5.51%
|
www.ciber.com
|
|
Cognizant Technology Solutions Corp.
|
CTSH
|
$ 54.15
|
-4.43%
|
www.cognizant.com
|
|
Computer Sciences Corp.
|
CSC
|
$ 44.65
|
-4.06%
|
www.csc.com
|
|
Convergys Corp.
|
CVG
|
$ 16.72
|
-3.63%
|
www.convergys.com
|
|
Covansys Corp.
|
CVNS
|
$ 11.00
|
-5.98%
|
www.covansys.com
|
|
DiamondCluster International Inc.
|
DTPI
|
$ 10.99
|
-1.26%
|
www.diamondcluster.com
|
|
Digitas Inc.
|
DTAS
|
$ 11.29
|
-4.89%
|
www.digitas.com
|
|
Electronic Data Systems Corp.
|
EDS
|
$ 23.96
|
-1.80%
|
www.eds.com
|
|
GTSI Corp.
|
GTSI
|
$ 14.00
|
-1.75%
|
www.gtsi.com
|
|
IBM Corp.
|
IBM
|
$ 99.23
|
1.36%
|
www.ibm.com
|
|
Ingram Micro Inc.
|
IM
|
$ 16.70
|
-4.30%
|
www.ingrammicro.com
|
|
Keane Inc.
|
KEA
|
$ 16.13
|
-8.30%
|
www.keane.com
|
|
Manchester Technologies Inc.
|
MANC
|
$ 4.25
|
5.46%
|
www.e-manchester.com
|
|
Manhattan Associates Inc.
|
MANH
|
$ 28.10
|
-2.09%
|
www.manhattanassociates.com
|
|
MPS Group Inc.
|
MPS
|
$ 10.25
|
2.40%
|
www.mpsgroup.com
|
|
PC Connection Inc.
|
PCCC
|
$ 10.18
|
0.89%
|
www.pcconnection.com
|
|
Perot Systems Corp.
|
PER
|
$ 13.49
|
-6.84%
|
www.perotsystems.com
|
|
Pomeroy IT Solutions Inc.
|
PMRY
|
$ 14.90
|
0.00%
|
www.pomeroy.com
|
|
Sapient Corp.
|
SAPE
|
$ 6.15
|
-14.46%
|
www.sapient.com
|
|
Tech Data Corp.
|
TECD
|
$ 41.44
|
-0.81%
|
www.techdata.com
|
|
The Titan Corp.
|
TTN
|
$ 21.74
|
-0.23%
|
www.titan.com
|
|
Unisys Corp.
|
UIS
|
$ 13.84
|
-4.55%
|
www.unisys.com
|
|
|
|
|
|
|
|
|
Current Index
|
1,183.32
|
|
|
|
|
Previous Week
|
1,210.45
|
|
|
|
|
Weekly Change
|
-2.24%
|
|
|
|
|
YTD Change
|
6.79%
|
|
|
|
|
Since Oct. Start
|
18.33%
|
|
|
Joseph C. Panettieri has covered Silicon Valley since 1992. He is editorial director of the New York Institute of Technology . Write to him at joe_pan5@yahoo.com.
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