Business consulting firm Resources Connection (RECN) Wednesday reported higher profit and revenues for the third quarter. However, the results missed Wall Street estimates and the company’s stock dropped about 10% during the after-hours session. The company said Tim Brackney has been named the new president and chief operating officer.
The Irvine, California-based company reported a net profit of $5.8 million or $0.18 per share for the February quarter, up from $4.6 million or $0.14 per share recorded in the same period of last year. Adjusted earnings more than doubled to $0.20 per share but came in below the forecast as the growth was restricted by a sharp increase in income tax provision.
Selling, general and administrative expenses, as a percentage of revenue, improved by 110 basis points compared to the year-ago quarter. Benefitting from the management’s aggressive go-to-market strategies, revenues moved up 4.1% to $179.5 million. However, the top-line fell short of expectations. A 9.7% fall in revenues in Europe was more than offset by a 6% growth in the domestic market and a 4% gain in the Asia Pacific.
Adjusted earnings came in below the forecast during the quarter as growth was restricted by a sharply higher income tax provision
“We continue to make good progress in improving our top and bottom line results. While Europe has faced macro headwinds, our business in North America and Asia Pacific delivered growth in the quarter and have performed well cumulatively through the first three quarters of the fiscal year,” said CEO Kate Duchene.
During the quarter, the management sanctioned a $0.13 per share dividend, which was paid to shareholders in March. In addition, 559,000 shares were repurchased during the three-month period for $9.2 million.
Resources Connection also announced the appointment of Tim Brackney as its president and chief operating officer. Most recently, Brackney served as president of the company’s North American operations.
Shares of Resources Connection gained around 24% since the beginning of the year. The stock closed Wednesday’s regular trading notably higher but fell sharply during the extended session.
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