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Forrester Research Q4 Profit Down; Outlook Weak

Forrester Research Inc. (FORR) reported that its fourth-quarter GAAP net income was $4.7 million, or $0.21 per share, compared with net income of $8.9 million, or $0.38 per share, for the same period last year.

On a pro forma basis, net income was $6.4 million, or $0.28 per share, for the fourth quarter of 2012. This compared with pro forma net income of $9.2 million, or $0.40 per share, for the same period in 2011.

Pro forma net income for the latest-quarter excluded stock-based compensation of $1.5 million, amortization of $0.7 million of acquisition-related intangible assets, and acquisition-related costs of $0.6 million related to M&A activity Forrester did not pursue.

Pro forma net income for the fourth quarter of 2011 excluded stock-based compensation of $0.5 million, amortization of $0.7 million of acquisition-related intangible assets, $0.4 million of reorganization costs, and net investment gains of $0.4 million.

Total revenues were $75.1 million for the fourth quarter of 2012, compared with $74.7 million for the fourth quarter of last year. Research revenues increased 3%, and advisory services and other revenue decreased 4% compared with the fourth quarter of last year.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.28 per share on revenues of $74.14 million for the quarter. Analysts' estimates typically exclude special items.

Forrester announced a reduction of approximately 30 jobs or an estimated 2.5% of its workforce worldwide to streamline its operations and to bring costs more in line with projected revenues for 2013. The company anticipates incurring approximately $1.5 million to $1.8 million of severance and related benefit costs in the first quarter of 2013 related to the reduction.

For the first-quarter, the company expects results to be in the range of loss $0.02 per share - profit $0.02 per share, pro forma earnings per share of about $0.09 to $0.13, and total revenues of about $66.0 million to $69.0 million. Analysts expect the company to report earnings of $0.20 per share on revenues of $71.47 million for the first-quarter.

Looking ahead for fiscal 2013, the company anticipates earnings per share to be in the range of about $0.52 to $0.59, Pro forma earnings per share of about $0.79 to $0.86, and total revenues of about $290.0 million to $298.0 million. Analysts expect the company to report earnings of $1.14 per share on revenues of $307.08 million for fiscal 2013.

Forrester Research also announced that its board has authorized an increase to its regular quarterly cash dividend to $0.15 per share. The next quarterly dividend is payable on March 20, 2013, to shareholders of record on March 6, 2013.

The company also announced that its board of directors authorized a $50 million increase in the company's stock repurchase program, bringing the total available share repurchase authorization to approximately $150 million. As of December 31, 2012, Forrester had approximately 22.3 million shares outstanding.

by RTT Staff Writer

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