American Management Systems Inc. has passed the $1 billion milestone in revenue.
The Fairfax, Va., provider of software and systems integration services reported 1998 revenues of $1.06 billion, up 21% from a year earlier. Fourth-quarter revenues were $301 million, up 31% from the year before.
Net income for the fourth quarter was $16.1 million, up 24%. Earnings of 38 cents per share were 2 cents more than expected, according to First Call, an American Banker affiliate.
"It looks like solid performance," said Mark D'Annolfo, an analyst at Adams, Harkness & Hill Inc. "They were hinting at some good numbers all quarter. They came in a little stronger than I would have thought." He had expected fourth-quarter revenues to total $17 million less than they did.
Against a backdrop of big revenue surges in other units, AMS lost ground in financial services. Fourth-quarter revenues in that unit dropped 1%, to $54.8 million.
State and local government business shot up 81% in the fourth quarter, to $92.4 million. The telecommunications unit increased fourth-quarter revenues 26%, to $76.4 million, and the federal government agencies unit increased revenues 23%, to $61.8 million.
Brian Maimone, analyst at ING Furman Selz, said the numbers for financial services "look worse than they actually are."
AMS reallocated certain revenues from financial services into telecommunications. On an apples-to-apples basis, he said, revenue in the financial services practice would have grown 10%.
"They are one of the preferred integrators" as financial institutions move to electronic commerce, he said. "AMS has worked with almost every major retail financial institution in the country in the last 10 years."
The company works with 47 of the 50 largest banking companies in North America. A major area of focus is to help banks integrate their proliferating distribution channels to improve customer relationships.
Sandy Devine, vice president of AMS' finance industry group, said her 500 employees integrate bank call centers, PC and Internet banking channels, ATMs, and branches, to ensure consistent customer contact.
"The trend I see is the convergence of electronic commerce and customer management needs within large banks," Ms. Devine said. That is a problem at some large institutions, she added.
"Branch automation platform folks are trying to enable their products to work in other channels like call centers, while Internet folks are saying that their stuff can be implemented at call centers or branches," Ms. Devine said.
"They are all driving toward the same outcome," she said, "but they are coming at it from very different starting points."
Her hardest task, she said, is to ensure that banks' management policies "glue it all together.
"The technology is tough, but it's actually the easiest part of the equation."