(Recasts slightly, adds conference call comments, analyst's comments, share movement)
By Dhanya Skariachan
BANGALORE, Feb 27 (Reuters) - Business process outsourcing firm ICT Group Inc ICTG.O posted lower quarterly results, hurt by restructuring charges and an 18-percent fall in domestic revenue, and warned of a first-quarter loss, sending its shares down 13 percent to their lowest in three years.
The Pennsylvania-based company said it sees higher training and start-up costs related to a contract and increased expenses due to the ramp-up of its offshore facilities, mainly in Philippines, during the first quarter.
ICT, which provides outsourced customer-care services primarily to U.S.-based companies including Pfizer (PFE.N), Washington Mutual Inc (WM.N) and Virgin Mobile USA VM.N, also forecast 2008 results below Wall Street estimates.
"I think their guidance is below my estimates, but I expected the management to be pretty conservative because they had a tough 2007," Craig-Hallum analyst Bob Evans said.
Evans, who blamed ICT's lackluster 2007 results on some execution issues, added that the demand for the company as well as other outsourcing firms like TeleTech Holdings Inc (TTEC.O) was increasing amidst fears of a slowdown in the U.S. economy.
ICT, which competes with offshore services providers such as Convergys Corp (CVG.N) and TeleTech, sees a first-quarter loss of 3 cents to 7 cents a share. In a conference call, the company forecast revenue of $108 million to $112 million for the quarter.
Analysts on average were expecting ICT to post a loss of 3 cents a share, before special items, on revenue of $115.0 million, according to Reuters Estimates.
For 2008, the company sees earnings of 52 cents to 62 cents a share on revenue of about $465 million to $475 million. Analysts expect earnings of 64 cents a share, before special items, on revenue of $479.4 million.
The company posted a fourth-quarter net loss of $3 million, or 19 cents a share, compared with net income of $5.1 million, or 32 cents a share, a year earlier.
ICT incurred restructuring charges of $3 million related to the closing of four of its contact centres, including two in the United States, and other charges of $1 million.
However, it does not see any restructuring charges in 2008, the company said in a conference call.
Excluding items, ICT posted a fourth-quarter profit of 6 cents a share, meeting analysts' estimates. Revenue fell 4 percent to $112.5 million, hit by the drop in domestic revenue.
Analysts had expected revenue of $114.6 million.
ICT's domestic revenue, which came in at $73.2 million, was dragged down by a shift of U.S. production to lower-priced, offshore facilities and a reduction in telesales call volumes for certain financial services clients.
Domestic financial services were hurt by cutbacks on credit card related programs made by many of its financial clients.
Craig-Hallum's Evans said he expects domestic revenue to continue to decline, as a percentage of the whole, as the company is moving more of its businesses offshore.
ICT shares were down $1.03 at $8.07, trading at more than twice the 50-day moving average volume in afternoon trade on Nasdaq. They had touched a three-year low of $7.90 earlier in the session. (Editing by Himani Sarkar)