Professional service provider Resources Connection, Inc. (RECN), Wednesday revealed its financial results for the fourth quarter, reporting a swing to loss, hurt by a 44.2% decline in revenues and lower gross margin. Resources Connection shares trading on the Nasdaq, fell 7.70% in after-hours trade.
Net loss for the fourth quarter was $6.284 million or $0.14 per share, compared to net income of $15.902 million or $0.35 per share in the same quarter a year ago.
On average, eight analysts polled by Thomson Reuters expected fourth-quarter earnings of $0.04 per share. Analyst's estimates typically exclude one-time special charges.
For the fourth quarter, Resources Connection recorded tax charges aggregating $3.5 million, which included a valuation allowance of $2.4 million against deferred tax assets in certain foreign locations and $1.1 million stemming from forgiveness of inter-company debt related to the capitalization of its French subsidiary. This impacted fourth-quarter loss per share by $0.05 and $0.08, respectively.
Operating loss for the fourth quarter was $3.095 million, compared to an operating income of $28.492 million in the fourth quarter last year.
Revenues for the fourth quarter plummeted 44.2% to $132.049 million from $236.724 million in the same quarter last year, below the Street estimates of $143.62 million, hurt by a drop in both U.S and international revenues.
Quarterly revenues from the U.S were down 42.9% from a year ago, while international revenues were down 47.4%, of which 37.5% of the decline was on a constant dollar basis.
Fourth quarter revenues, however, included revenues from an extra week and associated expenses , when compared to corresponding quarter a year ago.
Gross margin for the quarter was 38.2%, down from 39.4% in the comparable period of fiscal 2008.
Excluding stock based compensation expense, selling, general and administrative expenses for the fourth quarter declined to $50.984 million from $61.792 million in the same quarter last year.
Adjusted EBITDA for the fourth quarter also plunged to $3.449 million from $36.449 million in the corresponding quarter a year ago.
For the full year, net income declined to $17.764 million or $0.39 per share from $49.185 million or $1.03 per share from last year, below the analysts' earnings forecast of $0.56 per share.
Revenues for the full year declined to $685.576 million from $840.285 million a year ago, below the Street estimate of 697.21 million.
RECN closed Wednesday's trading at $17.53, up $0.49 or 2.88% on the Nasdaq. In the after hours, the Stock fell $1.35 or 7.70% to trade at $16.18.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.