GLOBAL - Hewitt Associates, the pensions consulting and human resources firm that is replacing its chief executive, made a loss of more than $200m (€157m) in the third quarter.
It posted a net loss of $202.2m, against a $33m profit a year ago, due mostly to a $249m charge relating to problems at its human resources business process outsourcing operations. Net revenues were down 2% at $698.2m.
The earnings statement itself had been delayed to today due to the problems.
The problems with implementing some of HR BPO contracts have coincided with the departure of chief executive and chairman Dale Gifford and its top HR executive Bryan Doyle. Last week the firm said Russell Fradin would take over from Gifford as of next month.
Amid the overall loss, Hewitt also disclosed a 35% decrease in consulting segment income to $38m in the quarter. Margins in this division were down to 17.4% from 27.5% a year ago.
The figures come as some finance websites have speculated the issues may put the firm "in play" as an acquisition target, although company spokespersons in the US and Europe did not respond to requests for comment on this matter.
"Despite issues encountered in the HR BPO business, we remain encouraged by the performance of our more established businesses, benefits outsourcing and consulting, which make up roughly 80% of our total revenues," said Gifford in a statement.
"We continue to expand margins in the benefits outsourcing business, achieve top-line growth in the Consulting business, and see continued strong demand for both types of services from new and existing clients," he added.
The company has reviewed its HR BPO contracts and concluded that they "will fall significantly short of our prior expectations".
"We are highly disappointed by these findings, and are aggressively addressing the issues, having already implemented key process improvements to drive future performance. We continue to see demand for our offerings, and remain fully committed to this business."