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Nov 4 (Reuters) – Computer services company Perot Systems Corp (PER) posted quarterly profit in line with market estimates, but forecast fourth-quarter results below expectations as its sees a drop of $25 million in revenue due to certain changes in contracts with clients.

For the fourth quarter, the company expects earnings of 23 cents to 25 cents a share, on revenue of $680 million to $695 million.

Analysts were expecting earnings of 26 cents a share on revenue of $729 million, according to Reuters Estimates.

Perot Systems recently extended its contract with not-for-profit hospital systems Catholic Healthcare West, under which it will transition the third-party contract management function back to the client, resulting in a reduction of about $16 million in revenue.

However, the contract will provide a profit margin benefit because the revenue was predominately pass-through expenses, the company said in a statement.

In another case, the company moved to a subcontractor role from prime contractor, costing it $5 million in revenue.

Perot Systems also expects normal seasonality to hurt revenue by up to $4 million and earnings by 2 cents per share.

For the third quarter, the company posted earnings of 25 cents a share, in line with market estimates. Revenue was $711 million, edging past analysts’ estimate of $710 million.

Shares of the company closed at $14.38 Monday on New York Stock Exchange.

 (Reporting by Purwa Naveen Raman in Bangalore)

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