William Blair & Company Initiates Coverage of Affiliated Computer Services, Inc. With Market Perform Rating.

CHICAGO -- William Blair & Company initiated research coverage of Affiliated Computer Services, Inc. (NYSE: ACS) ($54.29), a global provider of IT and business process outsourcing (BPO) services to commercial and government entities, with a Market Perform rating and a Core Growth company profile.

Associate Analyst Bhavan Suri and analyst Laura Lederman estimated that the company would generate earnings per share of $3.51 in fiscal 2008 and $3.91 in fiscal 2009.

"ACS is an excellent operating company, in our opinion, and has a number of differentiators that support the company's continued modest growth," Suri said. "Its diversified service portfolio, recurring revenue model, and high renewal rates (92% year-to-date) position the company to grow organic revenue at about 5%-6%. Moreover, ACS's continued international expansion, increasing penetration within the federal government, and strategic acquisition strategy should provide incremental revenue growth."

Suri continued, "However, given a number of challenges facing the company--including a tough competitive environment, the coming election, potential changes in government health care, and adjustments to state and local budgets--that may affect the company's one-time revenue, as well as management's reticence to provide revenue or EPS guidance, we believe that a Market Perform rating is appropriate."

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