Convergys Call Centers Lag in 3Q

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Customer relationship management provider Convergys Corp. sustained losses in its call center division during the third quarter because of poor economic conditions, the company said.


Third-quarter revenue for Convergys' Customer Management Group, which includes the company's teleservices unit, was $331.6 million, down 3 percent from the previous quarter. The decrease reflected weakness in the economy and client cutbacks after the Sept. 11 terrorist attacks.


The group's revenue from communications clients fell $16 million during the third quarter, but the decrease was partially offset by a $10 million increase in revenue from technology clients. Also, Convergys recently won new and expanded customer service contracts with Internet services provider AT&T Broadband and Schering Laboratories, the U.S. prescription pharmaceutical marketing arm of Schering-Plough Corp.


During the third quarter, Convergys launched a restructuring program for its teleservices group, taking a $53.3 million one-time charge as a result. The company said the restructuring involved the reduction of its low-efficiency, high-cost call center capacities.


However, the company's overall revenue for the third quarter was $567.2 million, a 2 percent rise from the previous quarter. Convergys' Information Management Group, which includes its billing, software and administrative unit, had a strong performance in the quarter.


For 2002, the company projected revenue increases of 13 percent in its IMG unit and 7 percent for its CMG unit.


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