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US-based engineering and technology services firm CDI Corp. (CDI: NYSE) surpassed analysts’ expectations yesterday by reporting revenue of USD 277.1 million for the fourth quarter ending 31 December 2013, a year-on-year increase of +2.4% from USD 270.5 million a year ago.
The company achieved a gross profit of USD 52.2 million, a fall of -2.5% from USD 53.5 million a year ago. Net income for the quarter was USD 2.4 million, down by -52% from USD 5 million in Q4 2012.
Included in the company’s fourth quarter results is a pre-tax restructuring charge of USD 5.7 million related to the company’s realignment announced in December 2013, and a pre-tax benefit from a legal settlement of USD 3.3 million.
Paulett Eberhart, President and CEO of CDI Corp., commented: “2013 was a challenging year for CDI, as substantial growth in both our OGC vertical and international business was offset by top line declines in our AIE and Hi-Tech verticals. In addition, our government, non-program staffing and MRI businesses saw a significant decline in revenues. We are taking actions to build revenues in all our target verticals and to invest in both non-program staffing and MRI, as we realign the organisation to improve operational effectiveness. These actions, combined with a more stable outlook for government agency spending, give up increased confidence that 2014 will be a year of revenue and profit growth.”
On an annual basis, the company reported revenue of USD 1.09 billion, a fall of -1.5% from USD 1.1 billion in 2012. CDI Corp reported a gross profit for the year of USD 206.6 million, equating to a year-on-year drop of -5.9% from USD 219.4 million a year ago. Net income for 2013 fell by a third (-32.5%) to USD 12.9 million, down from USD 19.1 million in 2012.
CDI Corp has operations in the Americas, EMEA, and APAC but no indication of the company’s performance by geography was provided in the results announcement.
CDI Corp provides Global Engineering & Technology Solutions and Professional Services Staffing. The company also provides staffing services through its franchised Management Recruiters International Inc. subsidiary.
Revenue derived from contract staffing in CDI Corp’s Management Recruiters International (MRI) business segment for the fourth quarter was USD 11 million, a fall of -11.3% from USD 12.4 million in Q4 2012. On an annual basis, revenue fell by -17.4% to USD 44.3 million from USD 53.6 million in 2012.
The Professional Services Staffing (PSS) segment reported a +3.3% increase in Q4 2013 revenue to USD 180.7 million compared with USD 174.9 million in Q4 2012. Revenue gains in the Oil, Gas, & Chemicals (OGC) segment were partially offset by declines in the Aerospace & Industrial Equipment (AIE) and Hi-Tech segments. On an annual basis PSS revenue fell by -0.3% to USD 708.6 million from USD 710.3 million in 2012. Again, strong growth in OGC revenue offset declines in the other business segments.
The company’s Global Engineering & Technology Solutions (GETS) segment reported further quarter revenue of USD 81.8 million, a year-on-year increase of +2.9% from USD 79.5 million in Q4 2012. Increased revenue in the OGC and AIE segments was partially offset by declines in the Hi-Tech division. On an annual basis, GETS reported revenue of USD 321.3 million, a decline of -1.2% from USD 325 million in 2012. Again, growth in OGC and AIE was offset by declines in the Hi-Tech division.
Looking forward, the company forecasts that revenue in the first quarter of 2014 will be in the range of USD 264 million and USD 274 million.
In trading yesterday, the company’s share price rose by +1.5% to USD 18.14, an increase of +8.8% compared with a year ago. Based on its current share price, the company has a market value of USD 353.6 million.