NCI Misses and Guides Lower

Shares of sell-rated Navigant Consulting (NCI) tumbled yesterday , after the company released earnings that fell well short of the Street's expectations and issued guidance below the current consensus view.

The company reported earnings that were 6 cents below the consensus estimate, and posted revenues that were down nearly 18% year-over-year.

Utilization in the quarter was down to 73%, versus 75% in the first quarter of 2009 and 79% in the year-ago period. Average bill rate fell to $250 from $252 in the first quarter of 2009 and $266 in the year-ago period.

Looking forward, Navigant expects to generate earnings of 60 cents to 70 cents per share in 2009, versus our estimate of 78 cents per share and the consensus estimate of 86 cents per share.

As we have maintained for some time, we expect Navigant's utilization rates to remain under pressure as clients continue to defer or forgo engagements. Companies in every industry are seeking to cut expenses wherever possible, and the operating climate for business consulting firms remains extremely challenging.

Our estimates and price target are under review pending our full analysis of the results, and we maintain our Sell rating on shares of Navigant.

Read the full analyst report on NCI