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Net income at CDI Corp. (NYSE: CDI) surged 57.1% in the third quarter. The company reported net income of $9.6 million, compared with $6.1 million in the same period last year as it continues to focus on higher-margin business.
CDI also reported third-quarter revenue rose 4.5% to $298.7 million from $285.9 million in the third quarter of 2006. Gross margin improved to 24.2% from 23.2%.
"Our three highest-margin businesses CDI Engineering Solutions, Management Recruiters International and AndersElite each reported double-digit revenue increases producing overall moderate revenue growth of 4.5% over the prior-year quarter," said President and CEO Roger Ballou.
Revenue in the company's engineering solutions segment rose 10.3% to $154.6 million in the third quarter. Gross margin increased year-over-year to 20.6% from 18.9%.
Management Recruiters International revenue rose 18.2% to $20.8 million in the third quarter, but gross margin slipped to 57.4% from 62.4% year-over year.
CDI's UK-based AndersElite division posted a 13.2% increase in revenue to $66.4 million in the third quarter. Its gross margin improved to 27.2% from 25.5%.
The company's information technology solutions segment posted an 18.1% decrease in revenue to $56.9 million, with gross margin declining to 18.5% from 20.0%.
CDI sold its Todays Staffing Inc. division to Spherion Corp. (NYSE: SFN) for $40 million in cash in September. CDI said third-quarter earnings included a $1.3 million after-tax gain on the sale.
"The combination of strong project demand in our engineering verticals, continued strength in U.K. and Australia infrastructure spending and strength in North American permanent placement could produce fourth-quarter revenue growth from continuing operations of 4% to 6% even with potential continued softness in the IT segment," said Ballou. "Revenue growth from continuing operations could be in the range of 6% to 8% for the full-year 2007."
CDI also announced today a dividend of 13 cents per share.
CDI Corp. (NYSE: CDI)
For the third quarter ended Sept. 30, 2007, compared with the same period in 2006.
Revenue: $298.7 million, +4.5%Net income: $9.6 million, +57.1%