Keane And Comdisco See Boost In Online Revenue

The pull of the new E-business-enabled economy on the IT services industry was evident Wednesday as Keane Inc. and Comdisco Inc. both reported increased online-services revenue.

Although Keane's total revenue for the first quarter of 2000, ended March 31, were $216.2 million, down from $285 million for the same period a year ago, the firm's E-Solutions business unit saw revenue of $34.5 million, outperforming the same period a year ago by 82% and the fourth quarter of 1999 by 17%.

Keane attributes the fall in overall revenue to the decline of its Y2K-related engagements. Overall revenue from business not related to Y2K was $210.8 million for the quarter, up 3% from the first quarter of 1999, and up 8% from the fourth quarter of last year.

Keane is a hot ticket right now with investors because the company has a large bookings backlog for E-business services, says Steve Ashley, senior VP and researcher with brokerage firm Robert W. Baird. "Keane has been repositioning its business away from legacy-system consulting and implementation for the past two years," he says. "They decided in late 1997 that legacy was not the future, but companies their size don't turn on a dime."

Comdisco today also proved it's putting the past behind it, reporting revenue for the second quarter, ended March 31, of $1.01 billion, up from $952 million a year ago. With its roots in business-continuity and disaster recovery services, Comdisco has pushed into E-services in recent weeks, with the formation of a Web-services division.

Comdisco also reported record net earnings of $43 million, or 26 cents per common share, for the second quarter. These numbers compare favorably with the $56 million loss Comdisco reported for the same period a year ago, when the company included a $150 million pre-tax charge associated with the sale of its portfolio of mainframe products and services to IBM.