After the market closed Wednesday, business service provider Sapient (NASDAQ: SAPE) reported an increase in fiscal 2012 third-quarter revenues and earnings compared to the prior-year similar period. The company’s SapientNitro segment also stated that it has acquired Second Story, an interactive studio. Considering the effects of hurricane Sandy, Sapient lowered fiscal 2012 fourth-quarter revenue guidance marginally.
The Massachusetts-based Sapient assists clients to leverage marketing and technology to transform their businesses. Sectors served by the company include financial services, technology and communications, consumer, travel, automotive, energy services, government, health and education. Sapient reported its fiscal 2012 third-quarter results after the market closed Wednesday.
Total revenues for the fiscal 2012 third quarter increased to $299.26 million from $273.88 million in the corresponding period of fiscal 2011. The revenue estimate of analysts was $281.34 million for the fiscal 2012 third quarter.
Net income for the reported quarter increased to $21.49 million, or $0.15 per share, from $19.75 million, or $0.14 per share, in the third quarter of 2012.
Non-GAAP net income for the third quarter of fiscal 2012 was $28.04 million, or $0.20 per share, compared to $25.67 million, or $0.18 per share, in the year-ago corresponding quarter. The consensus estimate of analysts was $0.13 per share for the comparable quarter of 2012.
Commenting on the results, Sapient CEO and Co-Chairman Alan Herrick said, “We are in a strong market position and excited about the future, despite the uncertain economic environment. The strategic addition of the teams from Iota and Second Story extends SapientNitro’s capabilities in the areas of consumer insights and interactive storytelling.”
Second Story, which was acquired by Sapient, is known for its pioneering work in creating immersive experiences that fuse digital interactivity with physical environments. Second Story is a well-recognized name among institutions like the Smithsonian and Cooper-Hewitt Design Center. The company has proven ability of storytelling across web, mobile and installations. Second Story’s work has received hundreds of awards at prestigious festivals, including One Show Interactive, I.D. Annual Review, SXSW and Sundance.
SapientNitro, which acquired Second Story, has a proven track of success in digitizing physical objects to unlock business value. The company digitized Coca-Cola’s first interactive vending machine and Unilever’s smile-activated ShareHappy.
Commenting on the acquisition, Donald Chesnut, CEO at SapientNitro, said, “Today’s connected consumers don’t distinguish between physical and digital, and neither should brands. Just as tablets created new experience paradigms and a canvas for brands to immerse consumers in highly personal ways, the same innovation is being brought to physical spaces. Second Story is exceptional in its ability to turn the static into cinematic; this expertise, combined with SapientNitro’s legacy in experience design, will only deepen our ability to redefine storytelling in a connected world.”
Sapient also stated that Second Story co-founders Julie Beeler and Brad Johnson will become part of Donald Chesnut’s global experience innovation team.
For the fiscal 2012 fourth quarter, Sapient now anticipates a revenue of $1 million to $2 million less than the previously issued guidance range of $289 million to $294 million on account of the impact of Hurricane Sandy. The revenue estimate of analysts is $289.19 million for the fourth quarter of 2012. The company expects a non-GAAP operating margin between 14.3% and 15.3%, including the effects of the hurricane.
Earlier in the first week of May 2012, the share price of Sapient dropped sharply from $12.50 to $9.77, following the fiscal 2012 second-quarter guidance that was below Wall Street estimates. The launch of software tools, which enable European bond issuers to standardize, validate and submit data to the European DataWarehouse (ED), boosted the share price to $11.00 in early September. Yesterday, Sapient opened 67 cents higher than the previous close of $9.90 per share and made a momentary dip to $10.30 per share. However, strong buying momentum pushed the share to $11.26 within half an hour of opening. Just before noon, the share price touched at high of $11.61. For the rest of the day, the share price sustained at around $11.50.
Sapient ended yesterday’s trading session at $11.44, up $1.54 or 15.6% on a volume of 3.85 million shares.
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