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Navigant Consulting Inc. (NCI - Analyst Report) reported third-quarter 2012 adjusted earnings per share of 23 cents, in line with the Zacks Consensus Estimate. GAAP net income per share came in at 22 cents compared with 20 cents in the year-ago quarter.

Navigant’s total revenue grew 1.8% year over year to $208.1 million, which came ahead of the Zacks Consensus Estimate of $202.0 million. Revenues before reimbursements nudged down 0.4% year over year to $181.1 million. Consultant utilization rate in the quarter was 73% versus 76% in the year-ago period.

Segment Performance

The Healthcare segment rose 7.9% year over year to $36.7 million driven by strong demand in the field of healthcare as well as life science practices. Energy segment revenue grew 3.1% to $22.9 million aided by increased inflow of energy efficient engagements.

However, Disputes, Investigations & Economics segment revenue fell 4.0% year over year to $82.3 million due to weaker business from the dispute market partially offset by stronger performance from technology and credit crisis related work from the financial services sector. Overall sluggishness in the economy forced clients to focus on cost controlling measures.

Financial, Risk & Compliance Advisory registered year-over-year decline of 1.6% at $39.2 million in the reported quarter, hurt by decreased revenues from the global investigations & compliance business, compensated somewhat by stronger revenues from mortgage servicing and restructuring areas.

Liquidity

At quarter-end, Navigant had $1.2 million. The company’s total non-current debt balances stood at $243.8 million.

Retirement of CFO

Navigant’s current Chief Financial Officer (CFO), Thomas Nardi, plans to step down from his position in the first quarter of 2013. Thus, the company is now on a lookout for a suitable replacement.

Outlook

For full-year 2012, the company narrowed its guidance for total revenue to the range of $830—$845 million from the range of $800–$860 million and adjusted earnings per share to the range of 88–95 cents from the range of 88–98 cents.

Our Take
   
While NCI Consulting has been able to post better results in two segments, its other two segments underperformed in the quarter. Moreover, the cut in guidance for earnings as well as revenue remains a matter of concern.

Navigant continues to face challenges on both the domestic and international fronts. This is primarily attributable to the difficulties in managing and staffing foreign operations, weaker international construction practice as well as limited new assignments and regulatory stringencies due to the ongoing uncertainty in the global economy. The company also believes that this bleak backdrop will linger in the near term before reviving in 2013.

Navigant, which competes with FTI Consulting Inc. (FCN - Analyst Report) and CRA International Inc. (CRAI - Analyst Report), currently carries a Zacks #3 Rank that translates into a short-term Hold rating.

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