Government Spending, Acquisitions Boost Perot

Boosted by increased spending by the federal government on IT outsourcing, Perot Systems' revenue rose 11% last year while swinging to a profit from a loss in 2001.

The company earned $78.3 million in net income on $1.2 billion in revenue for the year, compared to a $2.7 million loss on $1.1 billion revenue in 2001. Part of the sales jump came from the company's July acquisition of ADI Technology Corp., which gave it a bigger presence in the lucrative federal-government market.

The company wants to build on that. Last week, Perot Systems revealed it will pay up to $107 million in cash and stock to buy Soza & Co., which had $137 million in revenue last year, primarily providing IT services to agencies such as the Department of Defense and the Environmental Protection Agency.

Perot Systems CEO Ross Perot Jr. says the creation of the Department of Homeland Security, along with increased outsourcing throughout the government, is creating "unprecedented opportunities" for IT service firms.

Perot also managed to triple its profit while increasing sales 6% in the fourth quarter. The company earned $19.9 million on sales of $330 million, compared with $6.6 million on sales of $311 million in the fourth quarter a year ago. Looking ahead, Perot expects first-quarter earnings to be about the same or slightly lower than the fourth, with revenue of $335 million to $350 million.