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Korn/Ferry's 2Q earnings up, tops expectations

LOS ANGELES (AP) -- Korn/Ferry International shares jumped Friday after the staffing company reported its net income rose almost 10 percent in its second quarter, beating expectations as its revenue improved.

The Los Angeles-based company also forecast earnings for the second quarter that top analysts' expectations.

Its shares rose 92 cents, or 4.9 percent, to $19.64 in midday trading Friday.

Korn/Ferry said late Thursday that its net income increased to $11.4 million, or 24 cents per share, for the quarter that ended July 31. That's up from $10.4 million, or 22 cents per share, a year ago.

After adjusting for restructuring, acquisition and other special costs, it earned 33 cents per share in the latest quarter. Analysts surveyed by FactSet expected 30 cents per share.

Total revenue increased to $237.6 million from $196 million on improved fee revenue. Analysts expected revenue of $230.4 million.

CEO Gary Burnison said he is pleased with the company's continued momentum and said that the company is transforming its business to better serve staffing needs.

"Today's businesses are increasingly borderless and knowledge-based, and asking their workforce to do much more, with much less," he said in a statement. "Irrespective of industry or geography, talent is a driver of success."

William Blair analyst Timothy McHugh said that the company's gains primarily came from an improvement in its executive search business. He said this is tied to increased demand in the financial services sector in Europe and the Asia-Pacific regions. The analyst said in a research note that the results are further confirmation that the industry appears to be back on track for solid growth and Korn/Ferry continues to grow in line, or ahead of, its peers.

Korn/Ferry forecast earnings of 32 cents to 38 per share on revenue between $225 million to $237 million for its second quarter. Analysts had forecast earnings of 31 cents per share on revenue of $230.3 million.