Shares of Sitel Corp. sank $1.63 yesterday to a 52-week low of $2.94, after the company warned that its earnings for the rest of the year would fall short of analysts' expectations.
The 36 percent drop came after the stock traded yesterday as low as $2.4375. Volume was 2.9 million shares, significantly higher than its 52-week average volume of 250,000.
Baltimore-based Sitel said it expects to post third-quarter earnings of 1 cent to 2 cents below analysts' expectations of 6 cents per diluted share, and 3 cents to 5 cents below analysts' expectations of 10 cents per diluted share in the fourth quarter.
For the third quarter last year, Sitel reported a $3.6 million profit, or 5 cents per diluted share, on $189.6 million in revenue. For the fourth quarter of 1999, Sitel posted a profit of $4.9 million, or 7 cents per diluted share, on $205.7 million in revenue.
The company, which sells call-center and customer relations services to large corporations, has 25,000 employees at 73 sites in 18 countries
Sitel attributed its lowered revenue expectations to clients in the United Kingdom and Spain who took their customer service operations in-house, and the strengthening of the dollar abroad. The company also blamed weak revenue growth from several of its European operations resulting from "systems issues unrelated to Sitel."
"We don't see losing clients [to in-house operations] developing as a trend. ... We still see good improvement, when you look at year-to-year, at our revenue growth," said Sitel spokeswoman Kathy Krieger.
Krieger said the strength of the company's North American business - which accounts for 58 percent of Sitel's revenue and is set to double this year's revenue over last year's - is a barometer of future earnings growth.
The company also announced a new joint venture with Tata International Ltd., a major Indian technology services company that is part of a larger conglomerate called the Tata Group. Sitel said it plans to open a call center in New Mumbai, India, at the end of this year.
Ryan Sailer, an analyst who follows Sitel for investment management firm Kirkpatrick Pettis, called Sitel's downward revision of earnings "a little bit of a disappointment."
"Some investors probably have the perception that they're never going to shake the problems they've had in the past," said Sailer. "But [Sitel] has been showing improved results for the last few quarters."
The company plans to announce its results for the third quarter, which ends Saturday, after the market closes Oct. 25.