Shares of Heidrick & Struggles, International, Inc. (NASDAQ:HSII) were getting shellacked today after the human resources specialist posted a disappointing first-quarter earnings report. As of 12:30 p.m. EDT, the stock was down 15.5%.
Heidrick & Struggles, which specializes in executive search and other staffing needs, said adjusted earnings per share came in at $0.19, up from $0.07 a year ago, but short of expectations at $0.21. On the top line, revenue increased 7.6% to $140 million, but that also missed estimates at $145 million.
Despite falling short of analyst estimates, CEO Krishnan Rajagopalan said, "We are pleased with first quarter growth in revenue and profitability," and noted the company had improved its backlog. Executive Search, which is by far the biggest component of the company's business, saw revenue increase 7.6% to $124.5 million, or 9.1% after adjusting for currency fluctuations.
Looking ahead, Heidrick & Struggles projected revenue of $153 million to $163 million for the current quarter, which compares to the analyst consensus at $160.9 million.
While the executive search company's overall business looks solid after the quarterly report, the market seemed to punish the stock simply for missing estimates and the weak guidance. However, the with the solid growth in Executive Search, the sell-off seems overdone. I'd expect the stock to eventually bounce back.