CRAI Misses on Both Earnings & Revenues

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CRA International Inc (CRAI) reported net income of $1.4 million or 14 cents per share in second quarter 2013 versus $0.7 million or 7 cents per share in the year-ago quarter. However, quarterly non-GAAP earnings dipped to 15 cents per share compared with 20 cents in the year-earlier quarter. The non-GAAP earnings comprehensively missed the Zacks Consensus Estimate of 33 Cents.

Quarter Highlights

Revenues for second quarter 2013 were $65.2 million compared with $67.8 million in the year-ago quarter. The quarterly revenues missed the Zacks Consensus Estimate of $66 million. Non-GAAP revenues for second quarter 2013 declined to $64.1 million from $66.3 million in the year-ago quarter.

Gross profit was $20.2 million in the reported quarter versus $22.4 million in the year-ago quarter. Selling, general and administrative expenses (SG&A) stood at $15.4 million versus $16.9 million in the year-ago period.

During the reported quarter, CRA International’s portfolio delivered healthy performance in Antitrust & Competition Economics, Life Science, and Labor & Employment, partially offset by a relatively weak performance in Finance, Life Sciences, and Marakon.

For second quarter of 2013, the Adjusted Earnings Before Interest, Taxes, Depreciation and Taxes (:EBITDA) on GAAP basis was $8.8 million versus $7.9 million in the year-ago quarter.  Adjusted EBITDA on a non-GAAP basis was $8.9 million versus $7.8 million in the year-ago quarter.

Financial Position

At quarter-end, cash and cash equivalents were $16.3 million compared with $55.5 million at year-end 2012. Long-term liabilities stood at $6.7 million as of Jun 29, 2013 versus $10.6 million as of Dec 29, 2012.

Outlook

CRA International is encouraged by the quality of the new engagement wins across the organization. The company expects higher revenues in the upcoming quarter and relatively lesser selling, general and administrative expenses. The company aims to   deliver broad-based revenue growth across its portfolio in future. Although the M&A environment remains slow, certain areas of portfolio continues to perform well.
 
CRA International currently has a Zacks Rank #2 (Buy). Other stocks that look promising and are worth considering now in the industry include Franklin Covey Co (FC), Gartner Inc. (IT) and Information Services Group, Inc (III), each carrying a Zacks Rank #2 (Buy).
 

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