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Hudson cuts guidance, cites tough November

December 18 2008

The Hudson Highland Group Inc. (NASD: HHGP), a professional staffing firm, cut its fourth-quarter revenue guidance and reported it may take a noncash charge of between $30 million and $75 million.

Hudson said it now estimates fourth-quarter revenue of between $200 million to $210 million, down from its previous estimate of between $205 million to $220 million. It also said adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) could be a loss of $6 million.

Results for November were down year-over-year in all regions, the company said. And both contract and direct hire were down from October levels with the largest drop in direct hire.

"Hudson expected slowing economic conditions when it announced its third quarter 2008 results and set guidance for the fourth quarter," the company reported. "However, economic conditions during the quarter have been worse than anticipated with greater contraction in North America and the European Union, and slower growth rates in the emerging markets. The company expects weak global conditions to persist throughout 2009, resulting in a reduction in demand for its services."

Hudson also reported that it may take a noncash impairment charge in the fourth quarter of between $30 million and $75 million for goodwill and intangibles from various acquisitions made since 2004.

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