UPDATE 3-ACS profit beats expectations but outlook soft

* Fiscal Q3 EPS ex. items $1.00 vs market view of $0.93
* Q3 revenue $1.61 billion, slightly below expectations
* Sees Q4 EPS ex. items $0.95-$0.97, below expectations
* Shares unchanged after-hours

(Adds outlook, updates share move)
NEW YORK, April 30 (Reuters) - Affiliated Computer Services
Inc posted a stronger-than-expected rise in quarterly
profit thanks to demand for business process outsourcing and
technology services, but it gave a soft outlook due to weak
business spending.
The Dallas-based technology outsourcing company said fiscal
third-quarter net income rose to $93.2 million from $82.6
million a year ago, as earlier contracts began delivering
profits.
Excluding items, earnings for the quarter, ended March 31,
rose to $1 a share from 91 cents a share, above the average
analyst forecast of 93 cents, according to Reuters Estimates.
The company, which had forecast quarterly earnings
excluding items of 92 cents to 95 cents, said cost-cuts also
helped.
But the company forecast fourth-quarter earnings, excluding
items, of 95 cents to 97 cents, below the market's forecast of
$1.05.
It also said it expected a pickup in revenue growth to be
pushed out into the next fiscal year.
ACS shares were unchanged in after-hours trading, after
falling 0.4 percent to $48.38 in regular trading on the New
York Stock Exchange.
Third-quarter revenue also fell short of expectations, at
$1.61 billion compared with the analysts' estimate of $1.65
billion. ACS forecast fourth-quarter revenue to be similar to
the third quarter, disappointing investors who expected
growth.
The company blamed a slower economy for the
weaker-than-expected revenue, saying customers appeared to be
wary of initiating large projects in the current environment,
but said it believed sales were not lost, only delayed.
"I'm confident that we are doing what is necessary to
ensure strong, long-term growth in all critical areas and that
any shortfall in revenue is short-term in nature," Chief
Executive Lynn Blodgett told analysts on a conference call.
He cited healthy demand for its services, which enable
electronic payments and other processes that simplify corporate
accounting.
The company's customers include companies like struggling
automakers Chrysler and General Motors Corp . GM accounts
for 2 percent of its business, it said.
(Reporting by Ritsuko Ando; Editing by Leslie Gevirtz and
Steve Orlofsky)
((ritsuko.ando@thomsonreuters.com; +1 646 223 6084;
Reuters Messaging: ritsuko.ando.reuters.com@reuters.net))
Keywords: ACS/

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