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World – Korn/Ferry beats expectations

07 March 2013

US-based executive search firm Korn/Ferry International (KFY:NYQ) reported a +9% increase in fee revenue to $202.0 million in the three months to January (Q3). The rise was helped by recent acquisitions which contributed +7% to the jump in fee revenue. 

Korn/Ferry International is among the 50-largest staffing firms in the world, according to research by Staffing Industry Analysts.

The results beat analysts’ expectations despite a fall in net income. Total revenue rose +8% to $210.3 million. In the quarter, adjusted operating income was $16.2 million, a decrease of -5%, compared to the same time last year. Net income dropped -19% to $9.5 million because of higher charges and lower operating margins.

“I am pleased with the results of our fiscal 2013 third quarter, which once again included year over year growth within our broader talent management offerings,” said Gary D. Burnison, CEO of Korn/Ferry International. 

Looking ahead, the company projects fee revenue to range range between $210 million and $230 million for the coming quarter. 

The firm derives the majority of its sales from executive recruitment which saw fee revenue fall -1% to $130.5 million. Fee revenue in this segment fell across Europe, Middle East and Africa (EMEA) by -2% to $33.6 million. In Asia Pacific, fee revenues remained flat at $18.3 million while South America posted a +1% rise in fee revenue at $7.3 million. In the firm’s largest region, North America, fee revenue fell -1% to $71.3 million.

The company’s leadership and consulting business boosted revenue by +47% to $41.2 million while the recruitment process outsourcing (RPO) division, Futurestep, saw revenue rise +17% to $30.4 million.

After the earnings announcement on Wednesday, the company’s share price closed at $18.14, a decrease of -0.06%. Based on its stock price, Korn/Ferry has a market value of $881.59 million.  

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