Affiliated Computer Earnings In Line

ACS's stock price spiked twice this year, hitting a 52-week high $60.45 after receiving successive buyout offers from the hedge fund Cerberus Capital, which is working with Darwin Deason, the company's chairman.

But the company's board has bickered with Deason about whether his control of over 40% of the company's voting shares would discourage other bidders from stepping forward.

Recently, a new wrinkle has emerged as investors have removed liquidity from credit markets and raised rates on new debt.

This could make it harder for a buyer to arrange financing to top Cerberus' $62 a share offer, and potentially scupper Cerberus' offer as well, if previously lined-up investors demand higher interest rates and more favorable repayment terms.

In a conference call with analysts, Blodgett and Chief Financial Office John Rexford refused to discuss what a special board committee was doing to set up an auction for the company.

They however assured investors that uncertainty over the buyout would not affect acquisition plans, stock buybacks or other uses of cash.

Management also shrugged off concerns that problems roiling the mortgage industry could affect its contracts with banks, insurers and other financial services firms.

CFO Rexford said less than 1% of ACS's revenue comes from mortgage companies.

In the previous quarter, however, ACS wrote off a project with a mortgage company, said Rexford. But he sees no similar risks that would affect ACS' future revenue and profit.

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