Heidrick & Struggles International Misses on the Top and Bottom Lines

Heidrick & Struggles International (Nasdaq: HSII  ) reported earnings on Feb. 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Heidrick & Struggles International missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP earnings per share shrank significantly. GAAP loss per share shrank.

Gross margins dropped, operating margins shrank, net margins grew.

Revenue details
Heidrick & Struggles International reported revenue of $103.9 million. The seven analysts polled by S&P Capital IQ expected revenue of $109.6 million on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $127.2 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.07. The seven earnings estimates compiled by S&P Capital IQ forecast $0.16 per share. Non-GAAP EPS of $0.07 for Q4 were 83% lower than the prior-year quarter's $0.42 per share. GAAP EPS were -$0.02 for Q4 versus -$0.23 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 28.1%, 500 basis points worse than the prior-year quarter. Operating margin was -0.4%, 970 basis points worse than the prior-year quarter. Net margin was -0.4%, 280 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $111.7 million. On the bottom line, the average EPS estimate is $0.04.

Next year's average estimate for revenue is $466.2 million. The average EPS estimate is $0.79.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 77 members out of 91 rating the stock outperform, and 14 members rating it underperform. Among 31 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 27 give Heidrick & Struggles International a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Heidrick & Struggles International is hold, with an average price target of $12.75.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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