Affiliated Computer's Profit Slumps

Restructuring takes its toll.
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Third-quarter profit fell at Affiliated Computer Services (ACS) as restructuring charges and higher costs hurt results.

Following the news, the company's shares fell $2.95, or 5%, in after-hours trading to $56 on Instinet.

The IT outsourcing firm said Thursday that profit for the quarter ended March 31 fell to $77.9 million, or 62 cents a share, from $114.7 million, or 88 cents a share, a year earlier.

Excluding various restructuring charges and items, the company earned 81 cents a share, missing Thomson First Call's survey of analysts, which had produced an average estimate of 86 cents a share.

Revenue rose 24% to $1.31 billion, but also was short of First Call estimates, which had projected $1.36 billion.

The company gave initial guidance for fiscal 2007, saying it expects EPS and revenue growth of at least 10%, assuming no further share repurchases and taking into account the company's WWS unit divestiture.