Tuesday, professional business consulting firm Resources Connection Inc. (RECN) reported a decline in the second-quarter net income from the year-ago period primarily due to lower revenue.
The Irvine, California-based company reported a decline in the second quarter net income to $9.48 million or $0.21 per share from $13.04 million or $0.27 per share in the corresponding quarter last year. On average, eight analysts polled by First Call/Thomson Financial estimated earnings of $0.20 per share for the quarter. Analysts' estimates typically exclude special items such as one-time gain or expense.
The reported net income includes a stock compensation expense of $3.7 million, net of tax, for the second quarter ended November 29, 2008.
Revenue for the quarter decreased to $190.23 million from $206.64 million in the comparable period last year. Analysts estimated revenue of $198.26 million for the quarter.
Segment wise, revenues in the U.S. declined 11.0% quarter-over-quarter while international revenues improved 0.5% or 7.4% on a constant dollar basis.
Interest income for the second quarter of fiscal 2009 decreased to $0.38 million from $1.63 million in the comparable period last year.
Provision for income tax
Provision for income tax for the quarter decreased to $8.10 million from $10.60 million in the prior-year period.
Selling, general and administrative expenses, which include stock compensation expense, were $54.4 million for the second quarter of fiscal 2009, down from $55.5 million in the second quarter of fiscal 2008.
Resources Connection had reported a first-quarter net income of $12.5 million or $0.27 per share. Among others, Robert Half International Inc. (RHI), the Menlo Park, California-based company, which provides consulting and internal audit services, reported a third quarter net income of $65.8 million or $0.43 per share.
Thomas Christopoul, President and CEO of Resources said, "While the global economic events occurring during our second quarter are without precedent, our average weekly client service hours, excluding the holiday weeks, were relatively consistent throughout the quarter. However, foreign exchange rate changes from early in the second quarter through the end of the quarter accounted for an approximate $3.3 million reduction in revenues."
For the six-month period, net income decreased to $21.97 million or $0.48 per share from $24.62 million or $0.49 per share in the similar period last year. The reported net income includes a stock compensation expense of $7.4 million, net of tax for the six months ended November 29, 2008.
Revenue for the half-year period decreased to $397.54 million from $400.76 million in the corresponding period last year. Segment wise, revenues in the U.S. declined 5.5% compared to prior-year period while international revenues improved 12.6% or 12.1% on a constant dollar basis.
Don Murray, Executive Chairman of Resources is of the view that the flexibility of business model, in which approximately 70% of cash costs are variable, has allowed Resources to remain profitable and continues to generate cash flows from operations.
Christopoul noted that everyone at Resources is working harder to develop business and help clients through this difficult economic environment, while at the same time remaining conservative with respect to discretionary costs.
The company believes that the enormous change taking place in the global markets will present significant opportunities in the future.
Resources Connection closed Tuesday's regular trading at $15.46, down $0.30 or 1.90%, on a volume of 580,364 shares on the Nasdaq. In after-hours trade, the stock is currently up $0.04 or 0.26% trading at $15.50.
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