DST (NYSE: DST) has posted weaker core profits every quarter over the past year and a half, though revenue has generally improved. DST reported Q2 earnings more than doubled as revenue improved and a gain on the sale of a private-company investment boosted results.
Despite this adjusted earnings slipped. So whats it gonna take?
The palace guard is changing. Stephen C. Hooley, is a company insider who was appointed to its board last month. Mr. Hooley has served as DST’s president and operating chief since 2009. He previously served as president and CEO of Boston Financial Data Services, DST’s joint venture with State Street Corp. Many on the board are resigning. The former king who had an executive compensation package of some four times comparables will also be put out to pasture. So we have to rebuild the board quickly.
The company has huge debt which exceeds its net worth and earnings/revenue metrics are crawling along. So the question becomes what does the new old boy have in mind to create some shareholder wealth.
Need some communication here and rather soon if you need to ask. The normal debate is will the plan work or not. Right now no one can identify a plan. This is not how a stock increases in value.
George Gutowski writes from a caveat emptor perspective. Follow him on twitter.com/financialskepti