Executive-search company Korn/Ferry International (KFY), Monday said its profit for the fourth quarter rose from a year ago, due mainly to growth in revenues. Both earnings and revenues for the quarter came in ahead of Wall Street expectations.
Korn/Ferry's revenue for the fourth quarter grew to $238.6 million from $207.6 million a year ago. Fee revenue climbed 15 percent to $227.9 million, topping analysts' expectation of $223.58 million for the quarter.
Revenue growth was driven largely by increases in fee revenue at Leadership & Talent Consulting and Futurestep, as well as the acquisition of PDI Ninth House and Global Novations.
The company had acquired PDI Ninth House and Global Novations, both of which provide leadership development services. Excluding the acquisitions, fee revenue grew 1 percent to $199.1 million.
"I am pleased with our strategic progress and operating results for the fourth quarter, which includes accelerating the integration of our recent acquisitions as well as further diversifying and differentiating our Company." said Gary Burnison, CEO of Korn/Ferry International.
Los Angeles, California-based Korn/Ferry's fourth-quarter profit rose to $12.2 million from $12.0 million last year. Earnings per share for the quarter were $0.25, same as last year.
Excluding items, adjusted net income for the quarter improved to $15.6 million or $0.32 per share from $13.3 million or $0.28 per share last year. On average, five analysts polled by Thomson Reuters expected earnings of $0.31 per share for the quarter. Analysts' estimates typically exclude one-time items.
Operating margin declined to 6.8 percent from 7.8 percent last year. General and administrative expenses increased 16 percent primarily due to acquisitions in the current year.
Looking forward to the first quarter, the company expects earnings of $0.19 to $0.27 per share, adjusted earnings of $0.26 to $0.32 per share and fee revenues of $215 million to $227 million. Analysts currently estimate earnings of $0.28 per share and revenues of $217.47 million for the quarter.
KFY closed Monday's trading at $18.11, up $0.84 or $4.86%, on the NYSE. The stock further gained $0.39 or 2.15%, in after-hours trade.
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