Consulting services provider CRA International, Inc. (CRAI), reported Thursday a decline in profit for the third quarter, reflecting lower revenues as consumers cut down on discretionary spending in the face of continued economic recession. Both earnings and revenues came short of analysts' consensus estimate.
The Boston, Massachusetts-based company's net income for the third quarter declined to $2.88 million or $0.27 per share from $4.16 million or $0.39 per share in the year-ago quarter.
Net income, excluding one-time items, for the quarter slid to $3.35 million or $0.31 per share from $3.48 million or $0.32 per share in the prior year quarter.
On average, four analysts polled by Thomson Reuters expected the company to earn $0.48 per share for the quarter. Analysts' estimate typically exclude one-time charges and gains.
Quarterly revenues decreased substantially to $89.26 million from $111.16 million in the year-earlier quarter. Revenue, excluding items, for the quarter dropped to $86.33 million from $111.16 million last year. The Street estimated revenues of $94.53 million for the quarter.
Income from operations for the quarter decreased to $6.04 million from $10.16 million in the same quarter last year.
James Burrows, President and Chief Executive Officer, CRA said, "While it appeared that some of our key markets were beginning to loosen up at the end of the second quarter, the third quarter was a challenging and disappointing period. Many clients continued to restrict spending, and major litigation cases and consulting projects have stalled or are moving at a more deliberate pace."
During the quarter, the company acquired all of the assets of Marakon Associates, a strategy consulting firm. Financial terms of the acquisition were not disclosed. The acquisition is expected to provide CRA with additional capabilities and a new value management practice.
For the nine-month period, net income decreased to $5.31 million or $0.50 per share from $6.11 million or $0.56 per share in the same period last year. Adjusted net income for the nine months declined to $8.81 million or $0.82 per share from $11.82 million or $1.08 per share in the corresponding period last year.
Revenues for the period decreased to $227.06 million from $291.13 million last year, while excluding items, revenue dropped to $220.00 million from $291.13 million in the same period last year.
Looking ahead, CRA indicated that while long-term trends continue to favor, it anticipates a challenging business environment in the near-term. Further, the company believes market positioning in the areas it serves as strong, and that revenues would increase as general business conditions improve.
The company experienced an uptick in demand in the U.S. for chemicals-related work, M&A activities, and the accelerated policy debate around climate change. In the Middle East, however, it experienced some unexpected delays in obtaining signed contracts for work that had been awarded earlier; but now expects much of those revenues to be realized in the next few quarters.
CRAI closed Wednesday's trading at $27.29 on the Nasdaq.
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