StarTek (SRT) Misses Q2 EPS by 22c, Revenues Miss

StarTek (NYSE: SRT) reported Q2 EPS of ($0.23), $0.22 worse than the analyst estimate of ($0.01). Revenue for the quarter came in at $59.7 million versus the consensus estimate of $68.78 million.

• Total revenue was $59.7 million compared to $74.0 million.
• Gross profit was $5.2 million compared to $9.0 million, with gross margin of 8.8% compared to 12.1%.
• Net loss was $3.7 million or $(0.23) per share, compared to net income of $0.6 million or $0.03 per share.
• Adjusted EBITDA* was $0.7 million compared to $4.4 million.

“The combination of STARTEK and Aegis has created a truly global platform with more than 50,000 employees operating in 13 countries and servicing six continents,” said Lance Rosenzweig, president & global CEO of Startek. “This provides unprecedented benefits to all stakeholders, including clients, shareholders and employees.

“Our clients will reap the benefit of our global reach and access to new markets, multi-lingual offerings and technology-led innovations. Our shareholders can expect the diversification of our client base, added scale and operational synergies to enhance margins and profitability, while providing considerable cross-sell opportunities to accelerate growth. And our employees will now become part of an even larger organization with vast opportunities for professional development.

“The timing of this combination was also important given the challenges to Startek’s business over the last year. In the second quarter, the company continued to work through lower volumes and lost programs from its top wireless clients, which impacted both revenueand profitability. The wireless industry continues to face disruption, which has resulted in a rapidly evolving environment for service providers. These soft volumes were partially offset by strong growth from cable/media and retail clients, as well as the early benefit of ramping one of the large, strategic client wins announced earlier in the year. Going forward, we expect our combined business to be much less volatile, as no one client will represent more than 10% of revenue.

“We still have plenty of work ahead to replace the lost wireless programs and to integrate talent, experience, products and services across the combined organization. It will take several quarters to realize the benefits of our new global scale and footprint. Nevertheless, I strongly believe that our combined resources will enable world-class customer support for clients and produce operational synergies throughout the organization, which will drive growth and enhance profitability down the road. The opportunities ahead for Startek are just beginning, and I look forward to leading the team and all stakeholders into this next chapter of growth.”

For earnings history and earnings-related data on StarTek (SRT) click here.

You May Also Be Interested In

• Nomura/Instinet Upgrades Genting Singapore (GENS:SP) (GIGNY) to Neutral
• Innovaro (INV) Misses Q2 EPS by 9c
• Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) Tops Q2 EPS by 24c