Reflecting the continuing boom in technology markets, American Management Systems Inc. will go on a hiring spree.
The Fairfax, Va.-based software developer and systems integrator said it expects to boost its work force by more than 30% this year, in anticipation of growth in its telecommunications and financial services businesses.
"We are anticipating ballpark estimates of 20% in revenue growth in 1997," said Paul A. Brands, chief executive officer. "You have to have the people to do the work."
He said the company, with more than 7,000 employees in 49 offices in North America and Europe, will add nearly 1,100 new college graduates and undergraduates by midyear, and another 1,000 employees with business and consulting experience.
"You don't hire people unless you see the demand," said F. Mark D'Annolfo, analyst at Adams Harkness & Hill Inc., Boston. "It would not surprise me at all" if 1997 revenues exceeded $1 billion, he said, up from 1996's estimate of $801 million.
The growth indicators may hearten investors in American Management, many of whom dumped their shares last December after the company announced "a problem" in carrying out a fixed-price contract with an undisclosed customer.
It further warned of a negative impact on 1996 earnings, and Wall Street analysts quickly lowered their expectations. The stock price plummeted about 30% in several days of frenzied trading.
The shares ended Friday at $22.125, up 37.5 cents from a week earlier.
Mr. D'Annolfo said things are looking up for any company successful in the systems integration specialty. Computer Sciences Corp., Electronic Data Systems Corp., Cambridge Technology Partners Inc., and Technology Solutions Corp. all have "strong outlooks" for this year and "are off to a strong start" toward projected earnings increases of between 30% and 40%.
Most of these companies "got a little ahead of themselves" in late 1996 but have since "settled down nicely," the analyst said.
In the broader market, the Dow Jones industrial average rose another 106.24 points to close Friday at 6,989.34. The technology-laden Nasdaq composite gained 11.49 points for the week, to 1,367.19.
In other news, CFI Proservices Inc. withdrew its secondary public offering of common stock, citing a weakness in its stock price and management's reluctance to dilute the existing 4.8 million shares.
The company announced the 1.55 million-share offering in November 1996. Fred Hall, chief financial officer, said an unanticipated regulatory review pushed the timing of the deal too close to the end of the year, when money managers' attention tends to flag.
Matthew Chapman, chairman and chief executive officer, said, "We simply do not feel that the current market adequately reflects our historic ability to grow revenue and earnings."
The Portland, Ore.-based company provides PC-based banking software to about 5,000 financial institutions. Its shared closed Friday at $16.625, down 12.5 cents for the week.