Watson Wyatt
Yesterday, the company posted its third-quarter results. Revenues were $175.4 million, which was up from $171 million in the same period a year ago. Net income was $13.8 million, which compares with $12.5 million in the same period a year ago.
Generally, the company is growing all its divisions except one -- its retirement practice. Unfortunately, this was enough to dampen overall results.
A big growth driver for Watson Wyatt is its services to deal with spiraling health-care costs. Even though health care consumes $1.5 trillion of the U.S. economy, costs are nonetheless increasing at double-digit rates. No doubt, health care is perhaps the most important issue for many companies.
Unfortunately, Watson Wyatt cannot seem to find overall growth. In its conference call, the company indicated that next quarter's revenues will be flat. Basically, the diversification of its business segments is washing out growth.
As part of its business, Watson Wyatt does deal with insurance companies. Thankfully, the company derived only minimal revenues from "contingent commissions," a practice that has mired companies such as Marsh & McLennan
But as consulting starts to grow, Watson Wyatt could be an attractive buyout candidate. Thankfully, again, the company has enough suitors -- with enough heft -- to do a deal, such as Accenture
Fool contributor Tom Taulli does not own shares of companies mentioned in this article.