US – Hewitt Associates has cut its earnings expectations for the second quarter and the 2005 fiscal year, partly due to lower than expected consulting revenues.
It now expects 2005 earnings of $145m-150m (€108m-112m), compared to the $152-156m expectation announced just last month. Quarterly earnings are now expected to come in at $30-32m, from $33-35m before.
It cited lower margins on benefits outsourcing services and a one-off charge of around $8m related to the termination of an acquired client relationship.
It also saw a “higher mix of lower margin revenues within outsourcing and modestly lower consulting revenues versus expectations”.
"Current conditions have caused us to moderate our earnings expectations, however the company continues to expect revenues and margins to fall within the previously stated ranges, although at the lower end of the ranges for both segments," said chairman and chief executive Dale Gifford.
"We continue to experience growth in our services and remain excited about the increasing level of interest and activity we're seeing in broader HR outsourcing.”
Last month the firm named Perry Brandorff, its European head, as president of its consulting business. He has been with the firm for 23 years and led its merger with the UK’s Bacon & Woodrow.