Back to top

Analyst Blog

Navigant Consulting Inc. (NCI - Analyst Report) reported strong fourth-quarter 2012 results with net income of $13.5 million or 26 cents per share compared with $11.1 million or 21 cents in the year-earlier quarter. Excluding one-time items, adjusted earnings per share came in at 31 cents versus 22 cents in the year-ago quarter, representing a 40.9% year-over-year increase. Adjusted earnings for the reported quarter exceeded the Zacks Consensus Estimate by 7 cents.

For full year 2012, the company reported net income of $46.2 million or 90 cents per share compared to $41.1 million or 80 cents in the previous year. Excluding one-time items, adjusted earnings per share for 2012 stood at 98 cents compared to 84 cents in the preceding year.

Navigant’s total revenue grew 14.4% year over year to $225.4 million in the reported quarter. Revenues before reimbursements (RBR) climbed 13.7% year over year to $194.3 million with healthy revenue growth across all business segments. Consultant utilization rate in the quarter was 75% versus 74% in the year-ago period.

For full year 2012, total revenue increased 7.6% year over year to $844.6 million, while RBR climbed 6.9% to $743.4 million. However, consultant utilization rate for the year dipped 2.6% to 75%.

Segment Performance

The Healthcare segment's revenue rose 18.8% year over year to $47.4 million in fourth quarter 2012, driven by strong demand in the field of healthcare as well as life science practices. The Energy segment revenue grew 12.2% to $29.3 million, aided by increased energy efficient engagements and rise in market research and subscription offerings.

Disputes, Investigations & Economics segment revenue increased 1.2% year over year to $91.5 million on higher utilization in the Economics business, improved performance in Europe and margin improvement initiatives.

Financial, Risk & Compliance Advisory registered a year-over-year rise of 40.7% to $57.2 million in the reported quarter, propelled by several large mortgage servicing review engagements.

Liquidity

At year-end 2012, Navigant had $1.1 million of cash and cash equivalents compared to $3.0 million in the year-ago period. Long-term debt at the end of the year stood at $134 million. The company repurchased 582,000 shares during fourth quarter 2012 at an average price of $10.66 per share, bringing its tally for the year to 1.6 million shares.

Outlook

For full year 2013, Navigant expects total revenue to be in the range of $820 million to $880 million with solid growth in Healthcare and Energy segments. Adjusted earnings per share are expected in the range of 95 cents to $1.10.

We remain encouraged by the healthy earnings projection of Navigant, which competes with the industry giants such as CoreLogic, Inc. (CLGX - Snapshot Report), CRA International Inc. (CRAI - Analyst Report), and Corporate Executive Board Co. (CEB - Snapshot Report), each carrying a Zacks Rank #1 (Strong Buy). Navigant also currently retains a Zacks Rank #1.

Please login to Zacks.com or register to post a comment.