Chapter 3 iGATE Reports Results

http://money.cnn.com/news/newsfeeds/articles/globenewswire/182266.htm

Summary

This article talks about an integrated technology and operations (iTOPS) company, today announced its financial results for the fourth quarter and year ended December 31, 2009. The operating revenue increased $0.9 million. Its retained earning per share increased $0.03 and its diluted earnings from its continuing operations per share increased 25% comparing to the last quarter. However, its revenue from continuing operations dropped $25.7 million comparing to the previous year. There was also a 4% decrease in the diluted earnings from continuing operations. The Board of Directors recommended an annual dividend of $ 0.11 per share, based on the healthy performance in 2009.

Connection

We learned the multi-step income statement. The multi-step income statement has 6 sections. The most important one is income from continuing operations. This section takes up about 65% of the performance of the business. In the article, all the highlights are about income from continuing income. Because it is continuing, shareholders can expect about the same amout of revenue from the next fiscal period. Multi-step income statement gives us a clear opinion about every part of the company. It it a great way to measure a business.

Reflection

I learn a great lesson from this chapter. A successful company needs not only hard-working and talented employees, but also luck. If you just set up a company in Haiti, then you pretty much broke by now. We can see the company's "luck" by reading income from infrequent or unusual sources and income from extraordinary items. The only difference is that we can take the risk from income from infrequent or unusual sources. Extraordinary items usually mean bad luck. Luck is more important than anything, but that is something you cannot get on your own.