BearingPoint Inc., the McLean consulting firm formerly known as KPMG Consulting Inc., reported a profit during its first fiscal quarter, boosted by acquisitions that helped offset a decline in its core business.
During the quarter that ended in September, the firm reported net income of $15.2 million (9 cents per share), compared with a loss of $57.6 million (36 cents) during the same period last year. The year-ago loss was caused by an $80 million write-down of intangible assets.
Revenue jumped 23 percent, to $747.6 million. Excluding the impact of $180 million in revenue from acquisitions, the firm would have reported 7 percent less revenue than a year ago. The acquisitions included the Austrian, German and Swiss consulting practices of German auditing firm KPMG DTG and several Andersen Business Consulting practices, which BearingPoint hopes will help it build an overseas presence and give it the size to better compete with rivals such as Accenture Ltd.
The economic environment remained tough, with customers spending cautiously, a company spokesman said. The company's operating earnings, a measure of core performance, fell to $15.2 million, from $22.3 million last year.
While its government business grew -- up 21 percent this quarter -- other sectors, particularly high technology, declined. Including the effect of acquisitions, the firm reported $37 million in revenue from high-tech clients during the quarter, down 41 percent from last year. Also hard hit was the communications sector, where revenue fell 28 percent, to $96 million.
The bright spot was the firm's government business, by far its largest unit, which reported revenue of $267 million, compared with $218 million last year.
BearingPoint changed its name from KPMG Consulting this month to help differentiate it from accounting firm KPMG LLP. BearingPoint plans to spend $20 million to $40 million this year on a rebranding effort that will include commercials on CNN and broadcast-network television.