Sykes' stock continues slide weeks after earnings stumble

By SCOTT BARANCIK

© St. Petersburg Times, published June 28, 2000

TAMPA -- Two weeks after Sykes Enterprises Inc. lowered its second-quarter earnings estimate, the sell-off continues.

Sykes revised its earnings projection June 13. Investors, unsettled by the Tampa company's fourth missed estimate in five quarters, took the news hard, driving its stock down 18 percent, or $3.75, to $16.63 a share.

It hasn't stopped falling. Sykes' stock dipped 4.3 percent Tuesday, or 56 cents, to $12.50 a share, the lowest level since the company went public at $18 a share in April 1996. That brings the two-week toll to 39 percent.

It's not clear why the stock, which earlier this year traded as high as $51.06 a share, continues to fall. Sykes has not made any negative announcements since lowering its earnings estimate. On the other hand, the technical-support company hasn't given long-term investors any good news to hold onto, either.

"I think most people are missing that the business is doing well," said chief financial officer Mike Kipphut. "Thirty percent earnings growth over 1999 is nothing to sneeze about."

Kevin J. Dyches, an analyst with Prudential Securities, said Sykes' future earnings projections should follow the example of some airline pilots: Instead of promising short delays and then disappointing passengers, they promise long delays and pleasantly surprise them. He also predicted Sykes would undertake strong measures in the near future to try to boost its price.

"I think you'll see a stock buyback," Dyches said, "and I think you will see product or service announcements in the next month or two."

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