Goldman Lowers KPMG View

Analyst Gregory Gould cites lower revenue growth and operating margin

Goldman Sachs lowered its estimates on KPMG Consulting (KCIN ), a consulting services firm, citing lower revenue growth and operating margin. The company posted first quarter earnings per share of $0.14 versus $0.23 (pro forma) on a 10% revenue drop.

Analyst Gregory Gould lowered his fiscal year (June) 2002 estimate by $0.13 to $0.57 and his fiscal year 2003 estimate by $0.07 to $0.79. He noted that the first quarter earnings per share from operations of $0.14 was $0.02 below his estimate.

He says the fact that results fell below his estimates are not surprising given macro trends. He also noted that the company's current challenges appear to be external in nature and believes the company is well positioned for eventual recovery in technology spending. However, she says that near term appreciation in shares is likely to be limited by low revenue visibility. He rates the stock a market outperform.

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