Korn/Ferry Int'l First Quarter Results Top Estimates, Guides Q2 EPS In Line

(RTTNews) - Talent recruiter Korn/Ferry International (KFY) reported Monday a profit for the first quarter that more that doubled from last year, reflecting improved operating margins and fee revenue growth amid increases across all segments.

Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also provided earnings guidance for the second quarter of fiscal 2015, in line, but quarterly revenues below Street view.

"I'm pleased with Korn Ferry's performance during the quarter and our continued profitability. I am especially proud that all three service lines showed growth during the quarter resulting in a fee revenue increase of 10%, with an adjusted diluted earnings per share of $0.43, up 30% year over year," CEO Gary Burnison said in a statement.

The Los Angeles, California-based talent management solutions provider posted net income of $14.53 million or $0.29 per share for the first quarter, higher than 11.42 million or $0.24 per share in the prior-year quarter.

The company noted it undertook actions in the latest quarter to rationalize its cost structure to obtain efficiencies from prior year technology investments that enabled the further integration of recently acquired entities, as well as other cost saving initiatives resulting in a charge of $9.9 million.

Excluding items, adjusted net income for the quarter was $21.48 million or $0.43 per share, compared to $15.99 million or $0.33 per share in the year-ago quarter.

On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.40 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter grew 10 percent to $260.33 million from $237.59 million in the same quarter last year, and topped four Wall Street analysts' consensus estimate of $249.59 million.

Fee revenue for the quarter increased 10 percent or 8.9 percent on a constant currency basis, to $251.19 million from $228.44 million in the prior-year quarter.

Reimbursed out-of-pocket engagement expenses totaled $9.14 million, edging down from $9.15 million last year.

Fee revenue in executive recruitment, leadership & talent consulting data and futurestep services grew 8.6 percent, 5.8 percent and 23.7 percent, respectively.

Operating margin for the quarter improved 10 basis points to 7.4 percent from last year's 7.3 percent.

Looking ahead to the second quarter of fiscal 2015, the company expects earnings in a range of $0.42 to $0.48 per share, on projected fee revenues between $244 million and $254 million. Analysts currently expect the company to report fourth-quarter earnings of $0.42 per share on revenues of $257.81 million.

"The needs of global organizations are rapidly changing. While finding and recruiting the right executives is critical, companies are also seeking our expertise and offerings to help redefine their business through talent," Burnison added.

KFY closed Monday's regular trading session at $30.63, down $0.19 or 0.62% on a volume of 0.37 million shares. However, the stock gained $0.93 or 3.04% in after-hours trading.