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Kforce (KFRC) Misses Q4 EPS by 1c

February 9, 2016 4:03 PM EST

Kforce (NASDAQ: KFRC) reported Q4 EPS of $0.43, $0.01 worse than the analyst estimate of $0.44. Revenue for the quarter came in at $327.7 million versus the consensus estimate of $336.2 million.

GUIDANCE:

Kforce sees Q1 2016 EPS of $0.24-$0.27, versus the consensus of $0.25. Kforce sees Q1 2016 revenue of $323-328 million, versus the consensus of $332.83 million.

David L. Dunkel, Chairman and CEO, said, “We are pleased with our record 2015 revenues and our earnings per share from continuing operations. Full year Flex revenue for our Tech and FA reporting segments increased 6.1% and 18.0%, respectively, when compared to fiscal year 2014. We also made significant progress toward our longer-term profitability goals, as full year operating margins were 5.6% and earnings per share from continuing operations of $1.52 per share improved 63% from 2014.”

Mr. Dunkel continued, “As we moved into the second half of the year, we experienced deceleration in year-over-year Tech Flex growth rates. This deceleration was greater than we had anticipated in the fourth quarter due predominantly to specific large client dynamics, as they work to stabilize their operations after certain significant organizational changes. We experienced early project ends and a slowdown in hiring, and believe the activities at these few clients are very natural given the magnitude of the changes. Recent communications with these customers lead us to believe that there are extensive projects planned but awaiting budget approval. As a result, fourth quarter revenues of $327.7 million were below our expectations. We continue to believe that these client specific headwinds are shorter-term in nature and not a fundamental longer-term shift in spend, though we aren't anticipating improvement in the first quarter of 2016. We are working to further diversify our portfolio within our existing significant clients, which were the destination for a large portion of our accelerated hiring of Tech Flex sales associates in the fourth quarter of 2015. We continue to believe that secular drivers are a key factor in flexible staffing growth as the temp penetration rate remained near an all-time high, driven both by the increasing project nature of work as well as clients' desire to manage employment risk. I want to thank all of our clients, consultants and employees for making 2015 a successful year for Kforce.”

For earnings history and earnings-related data on Kforce (KFRC) click here.



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