CRAI Adjusted Earnings Beats in 4Q

Zacks

CRA International Inc (CRAI) reported net loss of $53.5 million or $5.33 per share in fourth quarter 2012 versus net income of $4.4 million or 42 cents per share in the year-ago quarter. Non-GAAP net income for the reported quarter was 43 cents per share compared with 40 cents in the year-earlier quarter. Non-GAAP earnings beat the Zacks Consensus Estimate of 36 cents.

For full year 2012, net loss was $5.21 per share versus net income of $1.57 in the previous year. Non-GAAP net income for 2012 was 98 cents per share compared with $1.60 in 2011. Non-GAAP net income per share for the year missed the Zacks Consensus Estimate of $1.38.

Quarter Highlights

Revenue for fourth quarter 2012 was $67.5 million compared with $75.0 million in the year-ago quarter. The quarterly revenues beat the Zacks Consensus Estimate of $64 million. For full year 2012, revenue stood at $270.4 million compared with $305.2 million in the preceding year.

The company’s core business, Litigation and Regulatory business, continued to deliver better results, despite the general industry setbacks, backed by growth in North America and Europe. Solid performance was also registered by Intellectual Property and Labor & Employment practices. Additionally, demand for the Management Consulting businesses also improved in the reported quarter.

CRA international witnessed a non-GAAP operating margin of 10% in the quarter. In the reported quarter, non-GAAP SG&A reduced to 21.9% from 23.7% in the year-ago quarter.

Financial Position

As of Dec 29, 2012, cash and cash equivalents and short-term investments were $55.5 million compared with $76.1 million as of Dec 31, 2011. Shareholders’ equity at year-end 2012 was $212.2 million compared with $268.4 million in the prior-year period.

Outlook

CRA international aims to do away with the underperforming assets from its portfolio to better focus on service portfolio and allocate its resources on core areas to enhance business profitability and is bullish about overall growth in 2013. Based on its restructuring initiatives, CRA International aims to achieve profitable growth both organically and through strategic hires.

However, the company operates in an intensely competitive landscape that includes big players such as Corporate Executive Board Co (CEB) and Navigant Consulting Inc (NCI). CRA International currently has a Zacks Rank #1 (Strong Buy). One of its competitors, Towers Watson & Co (TW) also carries a Zacks Rank #1 (Strong Buy).

 

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