Korn/Ferry Posts 1Q Loss, But Beats Estimates

LOS ANGELES (AP) — Staffing company Korn/Ferry International on Wednesday said it fell to a loss in the fiscal first-quarter due to weak labor markets and a restructuring charge.

However, its adjusted earnings and revenue topped Wall Street estimates, sending its shares sharply higher in midday trading.

The Los Angeles-based company said it lost $14.3 million, or 33 cents per share, down sharply from a profit of $15.9 million, or 36 cents per share, in the same period last year. Excluding restructuring costs of $18.2 million, Korn/Ferry said it lost $2.3 million, or 5 cents per share.

Revenue dropped 43 percent to $123.3 million, from $217.5 million in the same quarter in 2008.

Analysts surveyed by Thomson Reuters expected a loss of 6 cents per share on more modest revenue of $102.6 million.

Korn Ferry said demand for its services began to stabilize in the quarter, but the economy and labor markets remain uncertain. The company said it expects a decline in new business in the second quarter due to the seasonal nature of summer employment.

CEO Gary Burnison said Korn/Ferry is beginning to see some improvement as the market continues to stabilize.

However, Korn/Ferry avoided offering an earnings outlook.

"Given the uncertain economic environment and labor markets making a meaningful prediction about earnings remains impractical," the company said.

Shares jumped $1.36, or 10.2 percent, to $14.68.