GLOBAL – Consulting and HR firm Hewitt Associates, reported a 4% revenue increase in its consulting segment in the second quarter thanks to a growth in retirement plan management consulting in Europe.
However, it characterised the results as “clearly disappointing”.
The segment revenues on both a reported and pro forma basis hit $202.8m (€155.8m) compared with $195.3m a year earlier.
Its income increased 30% in the quarter, to $47m, compared with $36.2m.
Outsourcing segment revenues also increased to $494.3m, up 41%. Income however fell to $48.2m from $69.9m.
In spite of the two segments’ results Dale Gifford, chairman and CEO, labelled the second-quarter results as “clearly disappointing”.
"The market activity reinforces my belief that we have made the right strategic decisions over the last couple of years to significantly expand our HR services and capabilities, and we will be better positioned to deliver strong financial results and shareholder value in the future as a result," he added.
In March Hewitt Associates cut its earnings expectations for the second quarter and the 2005 fiscal year, partly due to lower-than-expected consulting revenues.
It said that it expected 2005 earnings of $145-150m compared with the $152-156m expectation announced just last month, while quarterly earnings were expected to come in at $30-32m, from the previously projected $33-35m.
Second-quarter reported earnings were $27.2m down from $30.4m. Core earnings fell 11% to $29.6m
Net revenues for the six-months to end-March increased 31% to $1.41bn, total company operating income was $110.6 m and net income rose 2% to $61.2m.
Hewitt said it expected total net revenue growth in fiscal 2005 to be “at the low end of 31-35%, or 9-11% on a pro forma basis.”
In February Hewitt 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.