Korn/Ferry Q1 Results Beat Estimates, Issues Upbeat Outlook

(RTTNews) - Korn/Ferry International (KFY) on Thursday reported a 10 percent increase in profit for the first quarter on higher fee revenue. Both revenue and adjusted earnings beat analysts' estimates. Looking ahead, the executive recruitment company forecast results for the second quarter mostly above Street expectations. Shares of the company gained more than 2 percent in extended trades.

Fee revenue for the quarter increased 22 percent to $228.44 million from $186.69 million last year, primarily driven by a 112 percent in fee revenue in Leadership & Talent Consulting and a 7 percent increase in fee revenue in Executive Recruitment, respectively. The overall fee revenue increase was driven by revenue growth in the industrial, life science/healthcare, financial services and consumer sectors.

Gary Burnison, CEO of Korn/Ferry International said, "With our leadership team effectively driving our strategy, we have increased revenue within our flagship Search business and broader talent management offering year over year - most important with strong margin expansion and earnings per share growth in the quarter, on an adjusted basis."

Los Angeles, California-based Korn/Ferry's first-quarter net income was $11.42 million or $0.24 per share, up from $10.42 million or $0.22 per share in the same period last year.

The latest quarter's results include restructuring, separation and integration/acquisition costs of $6.58 million, related to the integration of PDI Ninth House.

Adjusted earnings for the quarter were $15.99 million or $0.33 per share, compared to $10.42 million or $0.22 per share in the year-ago period. On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.30 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter grew 21 percent to $237.59 million from $196.02 million in the same period last year. Analysts had a consensus revenue estimate of $225.00 million.

Looking ahead to the second quarter, Korn/Ferry forecasts earnings in a range of $0.32 to $0.38 per share, with fee revenues of $225 million to $237 million. Analysts currently expect the company to earn $0.31 per share for the quarter on revenues of $225.35 million.

KFY closed Thursday's regular trading session at $18.72, up $0.48 or 2.63 percent on a volume of 383,342 shares. In after-hours, the stock further gained $0.43 or 2.30 percent to $19.15.