Consulting firm Korn Ferry shares are down Tuesday after the company posted a fiscal fourth-quarter profit that shrunk by almost 50% year-over-year.
The New York-based company posted a profit of $47.5 million, $0.91 per share, for the three months ended April 30, down from $91.7 million, $1.71 per share, in the same period a year earlier.
Shares fell 3.5% Tuesday afternoon to $49.11.
Revenue was $738.1 million, up from $727 million last year, of which $730.9 million was fee revenue. Analysts had projected fee revenue of $699.8 million. Adjusted earnings per share were $1.01, compared to Street expectations of $1.
Korn Ferry attributed the overall revenue bump to its acquisitions of Patina, Infinity Consulting Solutions and Salo, which were partially offset by a drop in demand.
Specifically, the company noted that less revenue than usual came from its executive search and permanent placement businesses, which have higher margins, and more than usual from its interim unit, which has lower margins but more resilience to a changing macroenvironment.
Looking ahead, Korn Ferry projects fee revenue to be flat or decline in its fiscal first quarter ended July 31 with a range of $668 million to $698 million, down year-over-year from $695.9 million. Analysts project $682.7 million on average.
Adjusted earnings are expected to be between $0.83 and $1 per share, down from $1.45 last year and below analyst expectations of $1.02.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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