Sykes Enterprises, Incorporated Reports Third-Quarter 2014 Financial Results

--Operating margins and diluted earnings per share results exceed the August business outlook range

--Capacity utilization rate increases comparably

--Announcing appointment of Drew Blanchard to lead financial services, healthcare and retail verticals

--Raising full-year 2014 revenue and diluted earnings per share outlook

TAMPA, Fla., Nov. 3, 2014 (GLOBE NEWSWIRE) -- Sykes Enterprises, Incorporated ("SYKES" or the "Company") (Nasdaq:SYKE), a global leader in providing comprehensive outsourced customer contact management solutions and services in the business process outsourcing (BPO) arena, announced today its financial results for the third quarter ended September 30, 2014.

Third Quarter 2014 Financial Highlights
  • Third quarter 2014 revenues of $332.7 million increased $10.5 million, or 3.3%, from $322.2 million in the comparable quarter last year, driven largely by the expansion of existing and new client programs across the communications and technology verticals, more than offsetting mixed demand within the financial services, healthcare and transportation and leisure verticals; on a constant currency basis, third quarter 2014 revenues increased 4.2% comparably  
  • Third quarter 2014 operating margin was 6.6% versus 5.8% in the same period last year; on a non-GAAP basis (see section titled "Non-GAAP Financial Measures" for an explanation and see Exhibit 6 for reconciliation), third quarter 2014 operating margin increased to 7.8% versus 7.1% in the same period last year, primarily driven by higher revenue and better expense leverage, coupled with favorable foreign exchange impact (approximately 40 basis points), all of which was partially offset by costs associated with a previously discussed exit of an outbound program within the financial services vertical due partly to regulatory changes  
  • Third quarter 2014 diluted earnings per share were $0.39 versus $0.33 in the comparable quarter last year, with the increase due principally to the above-mentioned factors coupled with a slightly lower effective tax rate  
  • On a non-GAAP basis, third quarter 2014 diluted earnings per share increased 15.4% to $0.45 from $0.39 in the same period last year (see Exhibit 6 for reconciliation) with the comparable increase driven largely by the previously-mentioned factors. Third quarter 2014 diluted earnings per share were also higher relative to the Company's August 2014 business outlook range of $0.34 to $0.37 also driven by the aforementioned factors. Adjusting for the non-GAAP effective tax rate of 27% as projected in the Company's August 2014 business outlook, third quarter 2014 diluted earnings per share would have been $0.43  
  • Consolidated capacity utilization rate increased to 79% in the third quarter of 2014 from 75% in the comparable period last year, due to growth in existing and new client programs across both the EMEA and Americas regions; consolidated capacity utilization rate remained unchanged sequentially at 79% in the third quarter of 2014

Americas Region

Revenues from the Company's Americas region, including operations in North America and offshore (Latin America, South Asia and the Asia Pacific region), increased 0.6% to $267.4 million, or 80.4% of total revenues, for the third quarter of 2014 compared to $265.9 million, or 82.5% of total revenues, in the same prior year period. This comparable growth was driven largely by the expansion of existing and new client programs across the communications and technology verticals more than offsetting mixed demand within the financial services, healthcare and transportation and leisure verticals. On a constant currency basis, third quarter 2014 Americas revenues increased 1.5% comparably due to factors noted above.

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