Perot Systems Corp. has issued a profit alert after losing business from two clients, including UBS Warburg.
The agreement with the investment bank subsidiary of the Swiss banking giant UBS AG remains in effect, but with less service to be provided, said the Dallas technology services and computer consulting company.
A separate 11-year technology services agreement signed in January 1996 between Perot and UBS AG remains intact. The loss of business involves separate contracts to provide services to various UBS Warburg operating units. For instance, Perot provides Warburg Dillon Read, UBS' investment banking division, with operational management services for its mainframes, desktops, and voice and data networks.
The other issue affecting revenue for the second quarter involves East Midlands Electricity, a U.K. regional utility that was acquired by Powergen PLC in July 1998. Powergen terminated its contract with Perot at the end of 1999.
First Call, which publishes analyst earnings expectations, expected Perot to earn 17 cents a share in the second quarter. Perot officials said earnings could be less than the 15 cents a share it earned in the same quarter last year.
The combined loss of business could cause Perot's revenues for the full year to be flat compared to 1999 revenues of $1.1 billion.
Advest Inc. downgraded Perot's stock from "strong buy" to "underperform." Shares of Perot closed Friday at $11, down 27% from last week.