US – Human resources consultancy firm Watson Wyatt says it expects lower than expected revenues in the 2003 fiscal year – hit by less predictable project work and the continued soft economy.
It said in a statement that it is “lowering its estimates for fiscal year 2003 revenues, from an estimated 4% growth to a range between flat and a 1% increase”. It had revenues of 710.5 million dollars in 2002.
It also foresaw lower than expected revenues in the most recent quarter. “Based on lower-than-expected revenue in November and December, the company now expects second quarter revenue to be 171-173 million dollars,” the Washington DC-based firm said.
“The shortfall is primarily due to the earlier-than-expected completion of special project work in the retirement practice for clients' year-end pension funding and expense issues. This special project work had driven better-than-expected results in the first quarter.”
It did not break down its revenue expectations by region. It said it expected to earn between 0.30-0.33 cents per share in the quarter, which ended on December 31.
“Revenue growth for the Benefits Group is now expected to be roughly 4%, reflecting a more moderate rate of increase in the retirement practice in the back half of the year and modest expansion in the healthcare consulting practice,”
It expects to generate approximately 10-20 million dollars in free cash flow in fiscal 2003.
"Less predictability from project work and continued soft economic conditions have caused us to moderate our revenue expectations for the year," said chief executive John Haley. "However, our benefits business remains quite strong, with better than 95% persistency in our core retirement area and a healthy flow of business in the pipeline.”
It will report second-quarter results on February 6.