Korn Ferry (NYSE: KFY) stock is trading near its 52-week high in the mid-day trading Monday after the Los Angeles-based management consulting firm reported better-than-expected earnings for the second quarter, mainly helped by cost-saving initiatives amid a difficult operating environment due to the Covid-19.
The company said that it earned $27.8 million, or 51 cents per share for the quarter, down from 77 cents per share in the comparable period of 2019. Excluding restructuring costs associated with Covid-19, profit was 54 cents per share, beating the analysts’ average estimate of 5 cents per share.
Revenue came in at $437.8 million, down 13 percent from the same period last year. Fee revenue declined 12 percent to $435.4 million in the quarter, as compared to $492.4 million in the year-ago quarter. The drop in revenue was mainly attributed to the weak performance across its different segments, such as consulting and recruitment, due to the pandemic.
Speaking on the quarterly performance, Korn Ferry’s CEO said "I'm not only encouraged by the financial results, but extremely proud of all that has been accomplished by our Korn Ferry colleagues to help our business rebound so dramatically. The actions, strategy, solutions and messages we've taken to the marketplace have resonated. Our clients have responded, and our colleagues have been resilient through a year that none of us have experienced in our lifetimes.”
Korn Ferry said operating costs in the quarter decreased to $389.6 million, versus $442.3 million in the year-ago quarter. Its operating margin in the quarter stood at 11.1 percent. The company did not issue any financial guidance for the upcoming quarters amid uncertainty due to the pandemic.
Korn Ferry stock stayed almost flat in terms of price change this year. The stock’s value decreased by nearly 6 percent on a year-to-date basis. At the current trading price, the company’s total market value stands around $2.179 billion.
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