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Navigant Consulting Inc. (NCI - Analyst Report) has reported fourth-quarter 2011 adjusted earnings per share of 22 cents, comfortably beating the Zacks Consensus Estimate of 19 cents as well as the year-earlier earnings of 15 cents per share. GAAP net income per share came in at 21 cents compared with one cent in the year ago quarter.

Navigant’s total revenue jumped 7.7% year over year to $197.0 million. Revenues before reimbursements rose 5.7% year over year to $171.0 million. Moreover, consultant utilization rate in the quarter improved 1.3% on a year-over-year basis to 76%, but fell 2% sequentially attributed to the seasonal fourth quarter. Average billable full time equivalents (FTEs) increased 7.6% year over year to 1,889 in fourth quarter 2011.

For full year 2011, the international consulting firm specializing in regulated industries reported adjusted earnings of 84 cents per share compared with 61 cents per share in the prior-year period. Total revenue climbed 11.5% to $784.7 million and revenues before reimbursements spiked 11.6% to $695.7 million.

Segment Performance

Business Consulting Services registered solid year-over-year growth of 14.9% to $89.8 million in the reported quarter, aided by strong performances by the healthcare and energy practices as well as Valuations and Restructuring teams. Dispute and Investigative Services crept up 3.1% year over year to $72.8 million. This was driven by strong demand in the field of the credit crisis, anti-money laundering projects, Technology Services practice area and international arbitration matters.

Moreover, International Consulting revenue increased 22.7% year over year to $19.7 million, attributed to increased demand, particularly in construction disputes matters. However, Economic Consulting revenue slipped 18.9% to $14.7 million due to early closure of some significant matters.

On a sequential basis, all the segment performance suffered due to seasonality, Business Consulting revenue before reimbursement fell 7%; Dispute and Investigative Services dipped 2.0%; Economic Consulting declined 20% and International Consulting decreased 4.0%.

Financials

At the end of 2011, Navigant’s cash and equivalents increased to $3.0 million from $2.0 million in 2010. The company generated net operating cash flow of $111.4 million, up from $41.8 million in the previous year. Debt as a percent of capitalization at December 31, 2011 fell to 20% versus 31% a year ago. As of December 31, 2011, total stock holder equity was $513.7 million versus $460.7 million at December 31, 2010.

During fourth quarter 2011, the company repurchased 234,300 shares at an average price of $10.92 per share.

Outlook

For full-year 2012, the company expects total revenue in the range of $800 million to $860 million and adjusted earnings per share between 88 and 98 cents.

Our Take

The company has outperformed the Zacks Consensus Estimate in all the four quarters of 2011 and we expect the same trend to continue going forward as Navigant enjoys solid market drivers in key market areas. Moreover, cost management, well-built human resource and impressive balance sheet position also augurs well. The Zacks Consensus Estimate for 2012 and 2013 are pegged at 92 cents and $1.06 respectively.

Navigant, which competes with FTI Consulting Inc. (FCN - Analyst Report) and CRA International Inc. (CRAI - Analyst Report), currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. We are also maintaining our long-term Neutral recommendation on the stock.

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