Analyst Firms Report Q3 Earnings in Line with Estimates
Two major technology market research and analyst firms that have significant CRM practices recently posted earnings that indicate a slight uptick in the tech market. Gartner recently reported third-quarter earnings in line with the company's previous estimates, but down significantly from the same period a year ago.
For the quarter, ended September 30, the Stamford, CT-based technology research firm posted net income of $5 million, down from $16 million for third quarter 2002, which is nearly what the company has made for all of this year. For the entire nine months of 2003 the company has made $17 million, compared to $30 million in 2002.
Revenue for the quarter was $197 million, an 11 percent downturn from the same quarter last year. Total revenue so far for 2003 was $615 million, a decrease of 7 percent over the first nine months of 2002.
For the most recently ended three months Gartner's research-contract value was $470 million, up slightly from the $468 million posted in the June quarter. Research revenue was $116 million, down 6 percent from the same quarter of 2002. Client retention in research reached 76 percent, up one percentage point from the same period a year ago. The company's consulting revenue was $63 million, a 21 percent drop from the third quarter of 2002. Consulting backlog was $93 million, an increase of $2 million over the prior quarter.
On the positive side wallet share and event revenue increased. Wallet share, a measure of dollar retention in the research industry, was 85 percent, up from 80 percent in third quarter 2003. And on the strength of three new events, the company's event revenue for the quarter was up 6 percent over last year to $16 million. The company began to see an upswing that will continue, according to Gartner chairman and CEO Michael Fleisher.
Looking future Gartner estimates that its next fourth quarter, ending on December 31, will hit a revenue target of $230 to $241 million, with $112 to $115 million of that coming from research, $63 to $68 million will come from consulting and events revenue, will reach $52 to $54 million.
Forrester, seeing much better results, posted third quarter revenue of $32.2 million, compared with $21.9 million for the third quarter of last year. Net income for the quarter, which ended Sept. 30, was $186,000, up from a net loss of $307,000 for the same period last year. Forrester's nine-month total was $90.7 million, compared with $73.4 million for the same period last year. For its next fourth quarter Forrester is estimating that total revenue will reach $32 to $35 million.
"The third quarter showed modest improvement in Forrester's business," George F. Colony, chairman of the board and CEO, said in a statement. "New business, as well as cross-sell business between legacy Forrester and Giga accounts, increased. Companies began to emerge from their hibernation to become more engaged in technology projects and technology spending. I'm cautiously optimistic about our business, based on the slight improvement we saw in the third quarter."
Forrester also continued to make major progress toward finalizing the integration of rival market researcher Giga. Early in the fourth quarter, the company plans to roll out an enhanced research offering called WholeView 2, which combines the best of Forrester and Giga, and focuses on comprehensive and collaborative views of technology.