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CRA International (CRAI) Q2 Earnings Beat, Revenue View Up

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CRA International Inc. reported strong second-quarter 2018 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of 67 cents per share beat the consensus mark by 13 cents and increased 39.6% year over year. Total revenues of $105.5 million beat the consensus estimate by $5.6 million and increased 12.7% year over year. On a constant currency basis, the top line rose $1.2 million year over year. Strength across services and geographies benefited both top and bottom lines.  

Notably, the company reported double-digit revenue growth in each of the past seven quarters and year-over-year growth in 15 of the past 18 quarters.

So far this year, shares of CRA International have gained 22.7% compared with 8% rise of the industry it belongs to.


Quarter Details

In terms of services offered, revenues from legal and regulatory services grew 26% year over year. This was driven by solid performance across the company’s Antitrust & Competition Economics, Finance, Forensic Services and Labor & Employment practices. Under management consulting, the company’s Energy and Life Sciences practices reported robust performance. Geographically, revenues from North America and international operations grew 14% and 9% year over year, respectively.

CRA International,Inc. Price, Consensus and EPS Surprise


CRA International,Inc. Price, Consensus and EPS Surprise | CRA International,Inc. Quote

Adjusted EBITDA in the second quarter increased 20.6% year over year to $10.7 million. The upside was driven by solid waste volume, improved pricing and higher revenues. Adjusted EBITDA margin increased 70 basis points (bps) year over year to 10.2%.

CRA International exited the second quarter with cash and cash equivalents of $9.03 million compared with $10. million at the end of the prior quarter. Long-term liabilities were $32.9 million compared with $34.5 million at the end of the prior quarter. The company used $32.8 million of cash in operating activities in the first half of 2018.

Dividend & Share Repurchase

In the quarter, CRA International returned $13.5 million to its shareholders, which includes $1.4 million of dividend payments and $12.1 million through repurchase of approximately 216,000 shares at an average price of $55.99 per share.

Concurrent with the earnings release on Aug 2, 2018, the board of directors announced a cash dividend of 17 cents per share, payable on Sep 21 to shareholders of record as of Aug 28.

2018 Guidance

Backed by the impressive top-line performance in the first half of 2018, CRA International raised its 2018 revenue guidance on a constant currency basis relative to 2017. The company now expects revenues in the range of $398-$406 million compared with the previously guided range of $380-$392 million.

The company reaffirmed its 2018 guidance for EBITDA margin and effective tax rate. Non-GAAP EBITDA margin is expected to lie in the range of 8.8-9.8%. Non-GAAP effective tax rate is estimated to be between 28% and 30% for 2018.

Zacks Rank & Upcoming Releases

CRA International currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Investors interested in the broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Cardlytics (CDLX - Free Report) , Switch (SWCH - Free Report) and Worldpay (WP - Free Report) . While Cardlytics and Switch will report their quarterly numbers on Aug 14 and Aug 13, respectively, Worldpay will release results on Aug 9.

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