(RTTNews) - Human capital and financial management consulting services provider Watson Wyatt Worldwide, Inc. (WW: News ) reported Thursday a decline in profit for the first quarter, reflecting one-time costs as well as a 6% decrease in revenues. Adjusted earnings per share, however, increased year-over-year and came in above the Street view. The company also provided outlook for the second quarter below analysts' estimate and reiterated its earlier guidance for the full year.

For the first quarter, net income dropped to $29.78 million or $0.69 per share from $35.16 million or $0.82 per share in the previous year. The results of the latest quarter included pre-tax transaction costs of $8.4 million related to Watson Wyatt's pending merger with Towers Perrin, and $1.9 million of severance costs.

Excluding items, earnings increased to $36.2 million or $0.84 a share from $35.2 million or $0.82 a share in the year-ago period. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.72 per share in the first quarter. Analysts' estimate typically excludes special items.

The company also noted that the strengthening of the U.S. dollar reduced earnings by $0.05 per share.

Revenue for the period decreased 6% to $401.34 million from $426.13 million in the first quarter of the prior fiscal year. Six analysts were expecting revenue of $394.04 million in the first quarter. On a constant currency basis, revenue came down 1%.

Segment-wise, revenue from Benefits Group dipped 4% year-over-year to $223.67 million from $232.70 million, and Human Capital Group revenue shrank 24% to $37.68 million from $49.60 million.
Revenue from Technology and Administration Solutions Group rose 4% to $55.46 million from $53.22 million, and from Investment Consulting Group grew 6% to $44.73 million from $42.11 million, while from Insurance & Financial Services Group declined 13% to $24.18 million from $27.81 million in the year-ago period.

Interest income came down to $350 thousand from $1.03 million, while the company recorded Other non-operating income of $1.14 million, compared to expense of $19 thousand in the prior-year quarter.

Looking ahead, for the second quarter, the company expects adjusted earnings of $0.81 - $0.86 per share, excluding severance and merger costs on revenues ranging from $405 million - $420 million. Analysts currently estimate earnings of $0.89 a share on revenues of $427.05 for the quarter.

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