Korn Ferry Says Coronavirus Clouds Executive-Search Firm's Outlook

Korn Ferry said the coronavirus has clouded the executive-search firm's outlook. The company's shares took a hit after CEO Gary Burnison said corporate social distancing policies were a problem.
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Shares of Korn Ferry  (KFY) - Get Report dropped after the executive search firm said the coronavirus pandemic has fogged the outlook for its operations.

“The uncertainty that the coronavirus has presented to all of us has clouded the near-term predictability of our business,” Korn Ferry CEO Gary D. Burnison said in the company’s conference call to discuss its latest earnings.

He said Korn Ferry has witnessed governments and companies implementing social distancing policies similar to its own. That has limited travel and group face-to-face interaction.

“These actions are unlike what you'd expect in a normal economic contraction,” Burnison said. “You haven't seen across the board cost cutting along with job eliminations.”

But it’s unclear how much additional social distancing or other measures will be implemented in response to the coronavirus and for how long, Burnison said. “Those are substantial unknowns.”

In any case, “the measures taken to date almost certainly will impact our business for the fiscal fourth quarter [ending April 30] and potentially beyond,” he said. The company didn’t offer earnings guidance for the quarter.

As for the fiscal third quarter, ended Jan. 31, Korn Ferry reported revenue of $528 million, up 9% from $486.2 in the year-ago quarter. Net income registered $21 million, or 36 cents a share, down from $45.4 million, or 80 cents, in the year-earlier quarter.

At last check, Korn Ferry shares traded at $27.58, down 13%. The stock has dropped 40% over the past year, compared to a little changed showing for the S&P 500 index during that period.