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Resources Connection Surges on Fourth-Quarter Earnings Beat

Resources Connection says the results were driven by 'pent-up client demand from the COVID-19 pandemic.'
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Resources Connection  (RGP)  took off Thursday after the consulting company posted fiscal fourth-quarter earnings that blew past Wall Street's expectations as clients emerged from the COVID-19 pandemic shutdown.

Shares of the Irvine, Calif., company were skyrocketing 18.7% to $16.33 on Thursday

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Resources Connection reported net income of $23.2 million, or 70 cents a share, compared with $4.1 million, or 13 cents a share, a year ago. Adjusted earnings came to 80 cents a share.

Revenue totaled $172.3 million, compared with $178.6 million a year ago. Analysts surveyed by FactSet were expecting the company to report earnings of 21 cents a share o revenue of $165.7 million.

The results were driven by a combination of better operational execution, pent-up client demand from the COVID-19 pandemic, the company said, and new demand in areas such as digital transformation as clients accelerated their digital agendas and resume discretionary spending.

Results also were boosted by increased use of contingent talent and the shift towards a more agile workforce model.

Revenue growth reflected strong demand across the majority of services, the company said, led by finance and accounting, business transformation and technology and digital, as well as industry verticals led by financial services and healthcare. 

"Coming out of the global pandemic, professional talent is making different choices," CEO Kate Duchene said in a statement. "The move toward careers built on agile work, increased flexibility and continuous learning is advantageous for RGP as we have been built to offer such a professional home for the best talent of the future.

For the year, the company reported revenue of $629.5 million, compared with $703.4 million in the prior year. Net income was $25.2 million for fiscal 2021 compared to $28.3 million a year ago.