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Towers Watson Reports Third Quarter Earnings

Stocks in this article: TW

Towers Watson (NYSE, NASDAQ: TW), a leading global professional services company, today announced financial results for the third quarter of fiscal year 2012, which ended March 31, 2012.

Revenues were $902 million for the quarter, an increase of 4% (5% constant currency) from $866 million for the third quarter of fiscal 2011. On an organic basis which excludes the impact of changes in foreign currency exchange rates, acquisitions and divestitures, revenues increased 4% from the prior-year third quarter.

Adjusted EBITDA for the third quarter of fiscal 2012 was $180 million, or 19.9% of revenues, versus $178 million, or 20.5% of revenues, for the prior-year third quarter. Adjusted EBITDA excludes transaction and integration expenses, non-cash stock-based compensation arising from the merger and a change in accounting method for pension.

Net income attributable to controlling interests for the third quarter of fiscal 2012 was $68 million, as compared to $69 million for the prior-year third quarter. For the quarter, diluted earnings per share were $0.95 and adjusted diluted earnings per share were $1.39. Adjusted diluted earnings per share increased 2% from the prior-year third quarter. Adjusted diluted earnings per share include a normalized income tax rate and exclude transaction and integration costs, non-cash stock-based compensation arising from the merger, amortization of merger accounting intangible assets, change in accounting method for pension and non-recurring other income. The normalized tax rate for the quarter was 37%.

“The Company continued to perform well this quarter and I am pleased with our results,” said John Haley, chief executive officer. “Our leadership faced several challenges this quarter: continued uncertainty in the European markets, building on the strong revenue growth of last year’s third quarter, and balancing the investments necessary to maintain our growth plans while maintaining margin stability. We remain committed to building on our strong foundation so that we can continue to serve the needs of our clients now and in the future.”

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