Sykes recovering from down quarter

One bad quarterly earnings report shouldn't be all it takes to create a huge setback for a publicly traded company. However, it almost derailed Tampa-based Sykes Enterprises Inc. by erasing nearly five years of value gain on its Nasdaq-traded stock.

The day of report, which cited an 83% hit in earnings over the year, Sykes' stock fell 22% to $11.93 per share from a close of $15.30 the previous day. It rebounded slightly over the following week, to $12.31 at Tuesday's closing.

The biggest part of the problem may not be with Sykes but the industry it is in — outsourced call centers for retailers and other service providers. Shlomo Rosenbaum, an analyst for Stifel Nicolaus in Baltimore who tracks the company, is maintaining a “buy” rating on the stock but says he would like to see some improvement in upcoming quarters.

“The key industry question is what it will take for volumes in general to stabilize,” Rosenbaum wrote in a research report. “Since contact centers are largely leveraged to retail sales, we believe unemployment levels need to at least stabilize (and probably start to decline) in order for consumers to feel better about spending, which would drive more retail sales and result in increased inbound call volumes.”

John Sykes, the company's founder and chairman emeritus, remains its largest owner with roughly 13% of outstanding shares. Sykes, who retired in 2004, declined comment on the latest quarterly report.