GLOBAL – Consulting firm Watson Wyatt & Co. says it is cautious about the outlook for revenues in the 2004 fiscal year.

“Watson Wyatt's outlook for the second quarter and full fiscal year 2004 remains cautious,” the US company said in its earnings statement for the first quarter of fiscal 2004.

It posted first-quarter income from continuing operations of 12.5 million dollars, down from 13.1 million dollars a year ago – hit by a 2.6 million-dollar severance charge related to headcount reductions. The company now has 3,975 ‘associates’, down 250 from 4,225 a year ago.

Revenues slipped to 171 million dollars, from 179 million dollars a year ago. It added that it expects second-quarter revenues to be two to three percent lower than the 174.6 million dollars seen in the prior year quarter.

“While the company expects the Benefits Group to realize higher levels of growth related to new client work, Technology Solutions Group revenues are expected to continue to decline,” it said.

For the full fiscal year 2004, the firm says it expects flat to one percent revenue growth. It expected benefits group revenues to rise “based on current economic conditions” though its technology and human capital arms would “continue to be negatively affected by lower levels of discretionary client spending”.

"Our performance in the quarter was ahead of expectations, on both a revenue and bottom-line basis," said president and chief executive John Haley.

“While our overall outlook remains cautious, new client wins and an increased level of proposal activity indicate that the growth prospects for our core Benefits Group appear to be increasing."

Meanwhile, Watson Wyatt LLP, the European arm of the operation, has appointed Paul Cook as a senior consultant in its benefits consulting practice.

He was previously a partner at Andersen, where he was head of the pension and actuarial practice and a member of the human capital UK leadership team.

"I am really pleased to welcome Paul Cook to Watson Wyatt,” said Babloo Ramamurthy, European head of benefits consulting. “He brings a wealth of consulting experience in a broad range of benefits and HR areas and will be a real asset to our team."