Street Unimpressed With Bearing Point's 10-Q

Bearing Point (BE) shares slid Monday following the company’s late Friday filing of financial results for its first quarter ended in March.

The company reported revenue of $866.3 million in the quarter, up from $833.7 million a year earlier; it reported a loss of 29 cents a share, versus 34 cents. The company’s cash position dropped to $245.5 million, from $389.6 million at the end of December.

Reading through some of the research on the IT consulting company, you have to think Bearing Point is the party in need of some advice. In short, the Street is not very happy. The company held a conference call with analysts on Friday afternoon, but did not take questions, and CEO Harry You did not participate in the call. I would note that the company did not even bother to disclose the results in a press release, announcing only that it was holding the call. The company also gave no guidance on the second or third quarters, or any other time period, for that matter.

Andrew Steinerman, an analyst with Bear Stearns, noted that the loss per share was “way below” his estimate, due to a weaker-than-expected gross margin. He also noted that the company saw its financial services revenue fall 35% year-over-year, due to the completion of a large client project, and the lack of any new work to take its place.

Steinerman notes that the company continues to pursue the potential spin-off of its EMEA segment to the unit’s management, but that there is now “a lower probability of this even occurring given recent credit market turmoil.”

Steinerman cut his 2008 GAAP EPS estimate on the company to 20 cents from 35 cents.

Julio Quinteros, an analyst with Goldman Sachs, slashed his 2007 EPS estimate to 5 cents from 28 cents; for 2008 he goes to 23 cents from 36 cents. He also trimmed his price target on the stock to $6.30 from $7. He writes that future share performance is likely to be “more of a trading call on investor perception about strategic options, including a potential sale.”

Moshe Katri, of Cowen & Co., writes that he views the company’s minimal offshore presence as a “material competitive weakness,” as well as a significant disadvantage at a time of economic weakness, which he says often means delays on onsite projects and an expansion of offshore activities (a situation which is good for the Indian IT outsourcers, but not so good for Bearing Point).

BE 1-yr chart: