BearingPoint's CEO Steps Down
Here's our updated post on the leadership change at BearingPoint:
BearingPoint, the McLean management and technology consulting firm, said today it is replacing its chief executive as it becomes current in its filings with the Securities and Exchange Commission.
Harry L. You, who joined as chief executive officer in March 2005 to help turn around the company, is leaving. He will be replaced by Ed Harbach, who joined in January as president and chief operating officer after a long stint at consulting firm Accenture.
With its third quarter results today, BearingPoint ends more than two years of being out of date in its federal filings. In 2005, the company announced it would have to restate its earnings and stopped filing reports with the SEC.
The restatement has cost the company hundreds of millions of dollars and depressed its earnings and stock price, which is down more than 80 percent from its highs.
Yesterday's third quarter filing reported a loss of $68 million (32 cents per share), compared a $29.6 million (14 cents) loss a year ago. Revenue increased to $861.9 million. The loss was greater than the 11 cents a share estimate by analsyts polled by Thomson Financial.
The announcements were made before the market opened. In morning trading, the company's shares fell $1, or 27.40 percent, to $2.65.
Roderick McGeary, chairman of the board, said in a statement that Harbach's appointment "reflects the Board's determination that the best way for the Company to create value for its shareholders, clients and employees is by intensifying our focus on operations -- and leveraging the full scale and scope of our global business."
"I am very enthusiastic about taking on the chief executive role. I have worked in the consulting business for my entire career and I am confident that our Company can create long-term value for shareholders," Herbach said.
McGeary added that You's "leadership has been important, particularly in building a strong foundation to bring current the Company's financial reporting, strengthen the balance sheet and resolve a significant number of serious financial, compliance, legal and other issues which existed when he arrived."
The company's financial services business has suffered in recent months. The company has acknowledged that it has been hard to retain financial services clients because of its own problems.
Some analysts want BearingPoint to consider selling off units -- and BearingPoint has publicly acknowledged it was considering selling its successful European unit.
But McGeary indicated in his statement today that might not be in the offing. He said the company's global business going forward would include "continuing to own and operate our European practice as an important part of our consolidated business."
With 17,000 people worldwide, BearingPoint was spun out of accounting firm KPMG in 2001.
-- Zachary Goldfarb
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