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View All NewsKforce Q3 revenue falls 1.5%
Kforce Inc. (NASD: KFRC) reported revenue fell 1.5% in the third quarter to $336.5 million.
Gross margin at the Tampa, Fla.-based professional staffing firm also narrowed to 31.3% from 32.2% in the year-ago quarter, driven by a 60 basis-point decline in flex gross profit margins, coupled with a reduction in the percentage of high-margin direct hire revenue as a percentage of total revenue, the company reported in a conference call with analysts.
Net income also fell in the third quarter, which included $2.6 million in after-tax severance costs related to realignment efforts aimed at streamlining the company.
| (US$ thousands) | Q3 2016 | Q3 2015 | % change |
| Revenue | $336,460 | $341,575 | -1.5% |
| Gross profit | $105,380 | $109,821 | -4.0% |
| Gross margin percentage | 31.3% | 32.2% | |
| Net income | $9,020 | $13,545 | -33.4% |
Quote
“Revenues in the third quarter of $336.5 million were largely as anticipated across all business lines as we continued to make progress in diversifying our client portfolio,” Chairman and CEO David Dunkel said. “We are encouraged by the late-quarter and early October trends in our tech and FA businesses that are providing momentum heading into the fourth quarter and should allow us to return to positive year-over-year growth overall and in our tech flex business.”
Revenue by function and segment
| (US$ thousands) | Q3 2016 | Q3 2015 | % change |
| Total flex revenue | $323,484 | $327,439 | -1.2% |
| Total direct-hire revenue | $12,976 | $14,136 | -8.2% |
| Technology | |||
| Technology flex revenue | $220,376 | $226,381 | -2.7% |
| Technology direct-hire revenue | $5,148 | $5,732 | -10.2% |
| Total technology revenue | $225,524 | $232,113 | -2.8% |
| Finance & Accounting | |||
| Finance & Accounting flex revenue | $76,290 | $76,707 | -0.5% |
| Finance & Accounting direct-hire revenue | $7,828 | $8,404 | -6.9% |
| Total Finance & Accounting revenue | $84,118 | $85,111 | -1.2% |
| Government Solutions flex revenue | $26,818 | $24,351 | 10.1% |
Gross margin by segment
| Q3 2016 | Q3 2015 | |
| Technology flex | 27.2% | 28.0% |
| Finance & Accounting flex | 29.6% | 30.4% |
| Government solutions flex | 36.4% | 36.9% |
Guidance
Kforce forecast third-quarter revenue of between $325 million and $330 million, which ranges from a year-over-year increase of 0.8% to a decrease of 0.7%.
Share price and market cap
Kforce shares fell 1.16% in early afternoon trading today to $17.10. The company had a market cap of $449.23 million, according to Yahoo.