Per Yahoo Profile:
WNS (Holdings) Limited provides offshore business process outsourcing services. The company's services include data, voice, and analytical services. It provides reservation, customer service, Web support, revenue accounting, audit and recovery, fare construction, and fare filling services to travel industry. The company also provides mortgage/loan processing; life, property, health, and casualty insurance processing; and financial advisory services to banking, financial services, and insurance industries. In addition, it provides enterprise services that focus on finance and accounting, human resource, and supply chain management; and knowledge services, which focus on market, business and financial research, and analytical services for manufacturing, logistics, retail, utilities, and professional services industries.
So it seems like a pretty diverse company - an outsource shop - which you would not think would get hit by subprime loans.
Then yesterday after the close, WNS comes out with this statement:
MUMBAI, India & NEW YORK--(BUSINESS WIRE)--WNS (Holdings) Limited, a leading provider of offshore business process outsourcing (BPO) services announced today that following its earnings call earlier today it was verbally advised by First Magnus Financial Corporation, one of its customers in the mortgage business, that they expect to stop substantially all work WNS does for them. First Magnus was expected to account for approximately 5% of WNS's revenue less repair payments for the period between 1 July 2007 and 31 March 2008. WNS expects that this event will have a material adverse impact on its financial performance and the guidance it had issued earlier today.
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Further today:
WNS expects the suspension to reduce its pretax profit by $26 million. The company said on Thursday it expected net income before certain charges to range between $41 million and $43 million for its fiscal year ending March 31, 2008.
WNS expects revenue excluding repair payments between $286 million to $291 million. The range is about $16 million less than what WNS guided for Thursday, before First Magnus Financial Corp. said it would stop originating loans and suspend operations.
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Per Reuters story: " In a statement, the company said net income before tax is expected to be about $26 million lower than previously estimated, of which about $16 million is the potential write off in respect of intangibles and goodwill."
As of writing the stock is just above $19, and as a trader it seems like a good trade could be had. In other market, maybe - in this one - eh, gonna pass.
But in terms of "wow I own a stock totally oblivious to US mortgage issues" - well as you can see, it can strike from very unsuspecting candidates. Here is a case of collateral damage. I am trying to think of that with each stock I hold or consider buying. You should too.
No position
