GLOBAL – Hewitt Associates has reported a decline in net income and earnings in the fiscal first quarter of 2006.
The firm said net income for the first quarter declined 7% to $31.5m (€26.3meuro) from $34.0m a year before. Net revenues slipped to $701.0m from $709.0m.
There were a number of “significant items” which hit the firm in the period, including stock options expenses and the termination of a human resources contract – for which it took a $10m charge. “Discussions with the client are ongoing,” it said.
And it was also hit by a $7m pretax charge related to “employee termination costs”.
Hewitt said that it completed an internal reorganization “designed to streamline operations and create greater accountability” during the first quarter.
Consulting segment income increased 23% in the first quarter, to $41.8 million. Consulting revenues increased 6% to $195.7m from $184.8m.
It said: “Revenue growth was strong across all practices and regions, driven by demand for the company's talent-related consulting services globally, favorability in actuarial consulting, and strength in healthcare consulting.”
Outsourcing revenues declined 3% to $512.1m, with income at $44.0m – down from $61.8m before.
It expects total net revenue to be comparable to fiscal 2005's level.
"We are off to a good start to the new year, relative to our expectations, and are encouraged by the high level of activity in the marketplace and the continued demand we are seeing for both our Outsourcing and Consulting services," said chairman and chief executive Dale Gifford.
"Excluding a couple of unusual items that impacted our results in the quarter, the underlying fundamentals of the business are quite strong.
“The performance of the Outsourcing business met our expectations, and we are particularly pleased with the performance of the Consulting business, which posted growth in both revenue and margins across the board that exceeded even our own expectations," he added.
"We've made progress toward structuring our business to achieve more profitable growth, and with continued focus on our cost structure and sharp execution, we feel that we are well-positioned to achieve the financial objectives that we set for the full fiscal year."