Korn/Ferry International Whiffs on Earnings

Seth Jayson, The Motley Fool
Updated

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 thisarticle 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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