Resources Connection Profit Declines - Update
(RTTNews.com) - Consulting services company Resources Connection Inc. (RECN), Tuesday reported a decline in first-quarter profit, hurt by lower revenue as clients cut down on spending, and margins deteriorated. While quarterly earnings came in line with Wall Street estimates, revenue fell short of expectations.
Moving forward, CEO Tony Cherbak said prospects appear bright in the second quarter as some clients start larger scale initiatives.
Resources Connection provides consulting services in the areas of accounting, risk management, corporate advisory, among others.
The Irvine, California-based company posted quarterly net income of $3.7 million or $0.09 per share, compared with $4.8 million or $0.12 per share last year.
On average, four analysts polled by Thomson Reuters expected earnings of $0.12 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter slid about 4 percent to $131.7 million from $137 million a year ago. Analysts expected revenue of $133.43 million for the quarter.
Among regions, revenue in the U.S. declined 2.5 percent year-over-year and international revenue was down 8 percent.
Results were also impacted by gross margin that slid 130 basis points from last year, due to higher healthcare costs and a decline in the bill rate/pay rate ratio.
During the quarter, the company repurchased 312,000 shares of common stock for $4.2 million, and has about $68.4 million remaining under its buyback program.
The company's stock closed Tuesday at $13.68, up $0.11 or 0.81%, on a volume of more than 172 thousand shares on the Nasdaq.
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