Daily NewsView All News
Executive search firm Korn/Ferry International (KFY: NYSE) last week reported revenue of USD 250.9 million for the third quarter ending 31 January 2014, an increase of +19% compared with USD 210.3 million a year ago. Fee revenue for the quarter rose by +21% in constant currency from USD 202 million last year to USD 242.2 million this year.
The company reported an operating income for the period of USD 27.3 million, a substantial increase of +214% from USD 8.7 million during Q3 2013. Net income for the third quarter rose by +124% to USD 21.3 million up from USD 9.5 million last year.
The company’s results materially exceeded analysts’ expectations, with year-on-year growth across all geographies for Executive search and across most industry verticals.
Gary D. Burnison, CEO, Korn Ferry, commented: "Korn Ferry had a strong third quarter, with year-over-year growth across all lines of business and within every region. We generated the strongest top-line results in the company's history, representing a +21% year-over-year increase in fee revenue, or +14% adjusting for the PDI Ninth House acquisition, on a constant currency basis, generating higher earnings per share."
By sector, the company’s Executive Recruitment business reported revenue of USD 149.7 million during the third quarter, a year-on-year increase of +15% from USD 130.5 million last year. Fee revenue increased by +12% in constant currency from USD 130.5 million in Q3 2012 to USD 144 million this year. The increase in fee revenue was driven by increases in all regions with the largest increases in North America and Europe. This increase is primarily attributed to an 11% increase in the number of executive recruitment engagements billed.
Regionally, Executive Recruitment fee revenue derived from North America increased by +8% from USD 71.3 million to USD 77.2 million. The biggest year-on-year rise was reported across EMEA, fee revenue rose by +17% to USD 39.1 million, up from USD 33.6 million. In Asia-Pacific, revenue rose by +10% to USD 20.2 million, compared with USD 18.3 million in Q3 2013. Executive Recruitment’s smallest region, South America reported fee revenue growth of +2% to USD 7.5 million up from USD 7.3 million last year.
Korn/Ferry’s Leadership & Talent Consulting business reported revenue of USD 64.2 million, up by +49% from USD 43.1 million. Fee revenue during the quarter increased by +52% in constant currency from USD 41.2 million to USD 62.3 million, year-on-year.
Revenue from the company’s Futurestep business increased by +18% to USD 37 million, up from USD 31.5 million last year. Fee revenue for the quarter was USD 35.9 million, a +20% increase in terms of constant currency from USD 30.3 million in Q3 2013. The increase in fee revenue was driven by a +17% increase in the number of engagements billed driven by large recruitment process outsourcing contracts entered into in the prior quarter, which began to be delivered in the current quarter and non-executive and other professional recruitment.
Looking forward to Q4 2014, and assuming that worldwide economic conditions, financial markets, and foreign exchange rates remain steady, fee revenue is expected to be in the range of USD 240 million to USD 250 million.
The company released their results after the close of business on the 6 March. Following trading on the 7 March, the company’s share price closed at USD 29.35, up by +13.6% on the day, and an increase of +61.4% compared with a year ago. Based on its share price, the company has a market value of USD 1.45 billion.