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CRA International (CRAI) Tops Q4 Earnings, Revenue Estimates

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CRA International, Inc. CRAI reported strong fourth-quarter 2017 results with robust year-over-year increase in revenues and adjusted earnings.

Adjusted earnings for the quarter were $5.9 million or 70 cents per share compared with $2.1 million or 24 cents in the year-earlier quarter. The bottom line comfortably surpassed the Zacks Consensus Estimate of 34 cents. The substantial year-over-year increase in adjusted earnings was aided by a strong rise in revenues and favorable tax act. The company reported adjusted earnings of $1.91 per share for the year ended Dec 30, 2017 compared with $1.33 in the prior year.

Quarter Details

GAAP loss for the quarter was $2.3 million or 28 cents per share against gain of $2.1 million or 24 cents per share in the year-ago quarter.

Non-GAAP revenues came in at $97 million compared with $79.6 million in the year-ago quarter. It surpassed the Zacks Consensus Estimate of $90 million. The rise was driven primarily by broad-based revenue growth in its Energy, Forensic Services, Life Sciences and Marakon Practices and strong contributions by its Antitrust & Competition Economics practice. International operations showed substantial growth with North American operations reflecting nearly 15% rise and European operations growing more than 50% year over year. Non-GAAP revenues for 2017 were $370.1 million compared with $323.9 million in 2016.

CRA International,Inc. Price, Consensus and EPS Surprise
 

CRA International,Inc. Price, Consensus and EPS Surprise | CRA International,Inc. Quote

Margins

Non-GAAP adjusted EBITDA was $15.8 million compared with $12.9 million in the year-earlier quarter. Non-GAAP adjusted EBITDA was 16.3% of non-GAAP revenues for the quarter, up 10 basis points year over year.

Balance Sheet and Cash Flow

As of Dec 30, 2017, CRA International had $54 million in cash and cash equivalents compared with $53.5 million in the prior-year period. Long-term liabilities were $32.5 million compared with $21.7 million a year ago. For 2017, the company generated $45.9 million of cash from operating activities compared with $48.2 million in the prior year. As of Dec 30, 2017, the company had $11.5 million of borrowings under line of credit compared with $7.5 million a year ago.

Moving Forward

For full-year 2018, CRA International expects revenues to lie between $380 million and $392 million and non-GAAP EBITDA margin to be 8.8-9.8%.

Zacks Rank & Other Stocks to Consider

CRA International has a Zacks Rank #2 (Buy). Other stocks in the industry worth considering include Exponent, Inc. EXPO, Envestnet, Inc. ENV and Alliance Data Systems Corporation ADS each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Exponent exceeded estimates in three of the trailing four quarters with an average beat of 12.4%.

Envestnet has an expected long-term earnings growth rate of 15%. It exceeded estimates in each of the trailing four quarters with an average beat of 4.2%.

Alliance Data Systems has an expected long-term earnings growth rate of 13%. It exceeded estimates in each of the trailing four quarters with an average beat of 9%.

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