Heidrick & Struggles International, Inc. (HSII), a provider of executive search and leadership consulting services, Tuesday, reported a decline in profit for the third quarter, reflecting lower revenues from all geographic segments due to a decline in the number of executive search confirmations and average revenue per executive search. However, the company's per share earnings came in well ahead of analysts' predictions.
Net income for the third quarter declined to $4.41 million or $0.25 per share from $13.98 million or $0.80 per share in the previous year. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share. Analysts' estimates typically exclude special items.
Total revenue for the quarter declined 34.5% to $108.27 million from $165.33 million last year. Analysts expected a revenue of $97.20 million for the third quarter.
By geography, revenue from Americas declined 37.7% to $50.95 million from $81.84 million in the previous year. European revenues declined 36.9% to $31.51 million from $49.91 million last year. Revenue from Asia Pacific decreased 20.7% to $21.06 million from $26.57 million a year ago.
Total operating expenses declined 29.7% to $101.55 million from $144.47 million a year ago.
The number of executive search confirmations in the quarter decreased 17%, compared to the 2008 third quarter. The number of consultants at September 30, 2009 was 365, compared to 416 at September 30, 2008. Productivity, as measured by annualized net revenue per consultant, was $1.1 million, compared to $1.5 million in the 2008 third quarter. The average revenue per executive search was $97,300, compared to $127,200 in last year's third quarter.
For the nine-month period, net loss was $30.29 million or $1.80 per share, compared to net income of $33.79 million or $1.89 per share a year ago. Total revenue for the period declined 40.4% to $299.59 million from $503.08 million last year.
Looking forward, the company expects fourth quarter net revenue to be between $103 million and $108 million and fiscal 2009 net revenue between $389 million and $394 million.
Analysts estimate fourth quarter revenues at $96.83 million. For the fiscal year, analysts anticipate the company to report revenues of $374.98 million.
HSII is currently trading at $28.29, up 2.90 or 11.42%, on a volume of 543K shares on the Nasdaq.
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