Korn/Ferry International Whiffs on Earnings

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Korn/Ferry International (NYS: KFY) reported earnings on Mar. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 31 (Q3), Korn/Ferry International missed estimates on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share dropped significantly.

Gross margins increased, operating margins dropped, net margins shrank.

Revenue details
Korn/Ferry International logged revenue of $194.6 million. The four analysts polled by S&P Capital IQ wanted to see revenue of $202.9 million on the same basis. GAAP reported sales were 0.3% higher than the prior-year quarter's $194.1 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.26. The seven earnings estimates compiled by S&P Capital IQ averaged $0.29 per share on the same basis. GAAP EPS of $0.25 for Q3 were 17% lower than the prior-year quarter's $0.30 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 100.0%, 7,150 basis points better than the prior-year quarter. Operating margin was 8.8%, 180 basis points worse than the prior-year quarter. Net margin was 6.0%, 120 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $212.2 million. On the bottom line, the average EPS estimate is $0.31.

Next year's average estimate for revenue is $838.4 million. The average EPS estimate is $1.27.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 144 members out of 162 rating the stock outperform, and 18 members rating it underperform. Among 58 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 53 give Korn/Ferry International a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Korn/Ferry International is outperform, with an average price target of $19.00.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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