Management services provider CRA International, Inc. (CRAI Quick QuoteCRAI - Free Report) reported first-quarter 2017 results, with GAAP earnings of $2,853 million or 33 cents per share compared with $2,423 million or 27 cents per share in the year-earlier quarter. The year-over-year increase in earnings was primarily due to higher revenues during the reported quarter.

Non-GAAP earnings in the reported quarter were $2,882 million or 33 cents per share compared with $2,659 million or 30 cents per share in the year-ago quarter. Non-GAAP earnings missed the Zacks Consensus Estimate of 37 cents.

Quarter Highlights

Non-GAAP revenues in the first quarter increased 10% year over year to $88.2 million. The rise was driven by broad-based growth in legal regulatory and management consulting lines of businesses. International operations also continued to deliver solid results, led by Antitrust & Competition Economics and Marakon practices. The reported revenues exceeded the Zacks Consensus Estimate of $86 million.

GAAP gross profit in the reported quarter was $25.6 million compared with $25.4 million in the year-ago quarter, with the respective margins of 29% and 31.4%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter increased 12.2% year over year to $13.8 million.

Acquisition

On Jan 31, 2017,  CRA International acquired C1 Consulting, a life sciences strategy consulting firm that helps pharmaceutical and biotech clients maximize their business potential through advanced analytics, customer insights, and therapy area expertise. The successful integration of the acquired firm will extend its capabilities in advanced analytics and market research as well as broaden its commercialization strategy offering, particularly related to rare and orphan diseases. The transaction will also enable it to extend its geographic footprint with new offices in San Francisco, California, New Jersey and Lucerne, Switzerland.

Balance Sheet

As of Apr 1, 2017, CRA International had cash and cash equivalents of $21.8 million while its long-term liabilities were $25.1 million. Cash used in operating activities for the quarter were $20.4 million compared with $10 million in first-quarter 2016.

Outlook

For 2017, CRA International expects non-GAAP revenues of $350–$360 million on favorable growth dynamics. Non-GAAP adjusted EBITDA margin is expected in a 15.8–16.6% band.

Although CRA International has been witnessing healthy demand lately, soft economic conditions and macroeconomic uncertainties continue to be headwinds. Proper integration of new hires remains an additional concern for the company.

CRA International currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include CBIZ, Inc. (CBZ Quick QuoteCBZ - Free Report) , S&P Global, Inc. (SPGI Quick QuoteSPGI - Free Report) and PageGroup plc (MPGPF Quick QuoteMPGPF - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CBIZ topped estimates twice in the trailing four quarters with an average earnings surprise of 18.4%

S&P Global has a long-term earnings growth expectation of 12.3%. It has a positive earnings history, beating estimates in each of the trailing four quarters.

PageGroup has a long-term earnings growth expectation of 15%.

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