Towers Watson fiscal 3Q profit jumps 39 percent

Towers Watson fiscal 3rd quarter profit jumps 39 percent, exchange business boosts revenue

Associated Press

NEW YORK (AP) -- Towers Watson & Co.'s fiscal third-quarter earnings jumped 39 percent, as the human resources and risk management consultant's revenue got a bump from a new business and the company kept expenses in check.

The New York company also raised its fiscal 2013 earnings forecast on Tuesday.

Towers Watson earned $94.9 million, or $1.34 per share, in the quarter that ended March 31, up from $68.2 million, or 95 cents per share, a year ago. Excluding items like transaction and integration costs, adjusted earnings totaled $1.60 per share.

Revenue rose more than 4 percent to nearly $941 million.

Analysts expected, on average, earnings of $1.49 per share on $946.6 million in revenue, according to FactSet.

Towers Watson booked $30.6 million in revenue from its Exchange Solutions segment in the quarter. That segment operates private health insurance exchanges for employer-sponsored coverage for both active employees and retirees.

The company didn't operate this segment in last year's quarter, and it said it incurred significant costs in the first half of this year, as it pushed to enroll new members.

Towers Watson said its costs for providing services edged up 1 percent in the fiscal third quarter to $801.4 million, largely due to increases in salaries and employee benefits.

The company now expects fiscal 2013 adjusted earnings ranging from $5.44 to $5.49 per share, up from its forecast in February for earnings of $5.28 to $5.38 per share. It also forecasts revenue of about $3.6 billion after predicting in February a range of $3.6 billion to $3.65 billion.

Analysts expect, on average, earnings of $5.37 per share on $3.6 billion in revenue.

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February forecast:

For the full 2013 fiscal year, the company expects to earn between $5.28 and $5.38 per share on revenue of $3.6 billion to $3.65 billion.

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