Profit up 38% at American Management Systems.

Software and technology consulting firm American Management Systems Inc. announced second quarter earnings of $5.8 million, a profit driven by higher revenues from financial institutions and telecommunications companies.

Fairfax Va.-based American Management Systems reported that earnings for the quarter ended June 30 rose 38 percent over the same period in 1993, on revenues of $109.8 million.

Second quarter earnings per share reached 34 cents, up slightly from an analysts' consensus of 30 cents per share for the second quarter, according to data published by First Call Corp.

For the first half of this year, profits reached $10.3 million on revenues of $210.0 million, up from $7.7 million in net income on $178.1 in sales for the year-earlier period.

Superhighway Driven

American Management Systems officials said higher profits were driven by revenue gains from banks, state and local governments, and especially telecommunications firms that are gearing up to ride the so-called information superhighway.

Sales to telephone companies and other communications providers jumped to $26.8 million for the second quarter, up 37% from the same period in 1993.

But software sales and services revenues from banks and insurance companies also rose significantly, American Management Systems officials said. Revenues from financial institutions rose to $20.6 million, up from $15.8 million in the second quarter of 1993.

Business Good All Around

The rise was attributed to business with new clients, as well as a buildup of ongoing projects with banks.

Additionally, banking revenues were boosted by the December 1993 acquisition of Vista Concepts, Inc., a developer of trust software.

"Were looking for Vista to contribute about $10 million over the course of this year, and so far it has been meeting that," said Peter DiGiammarino, the American Management Systems vice president in charge of the company's financial institutions group. "It wasn't an overwhelming component, but it pulled its weight."

Mr. DiGiammarino said he saw encouraging signs in sales of other software products, as well as in process re-engineering consulting.

"The interest in some of the risk management work we're doing, as well as the trend towards customer management, as opposed to account management, seems to be moving a little faster than we had expected," he noted.

Mr. DiGiammarino added that American Management Systems was successful in signing up a number of banks in the second quarter to buy a recently introduced customer information system called Strata.

Strata is also noteworthy because its part of new wave of software that uses a so-called "client-server" computing design. Based on networks of personal computers, client-server systems aimed lessen banks' need for mainframes.

Mr. DiGiammarino said that financial firms his group is working with are beginning to commit larger sums for more ambitious, bank-wide systems projects.

"We're no longer just automating what's already there, just replacing people or paper," he said. "That makes it more strategic, bigger, more complex, and riskier than ever before."

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