Watson Wyatt Worldwide Reports First Quarter EPS of $0.56 on Strong Revenue Growth.Raises Fiscal 2007 Guidance
ARLINGTON Arlington, county, United States
Arlington, county (1990 pop. 170,936), N Va., across the Potomac River from Washington, D.C. Arlington is a residential and commercial suburb of Washington. , Va. -- Watson Wyatt Worldwide, Inc. (NYSE NYSE
See: New York Stock Exchange :WW), a leading international human capital and financial management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business
service industry - an industry that provides services rather than tangible objects firm, today announced financial results for the first quarter of fiscal year 2007, which ended September September: see month. 30, 2006.
Revenues were $336.0 million for the quarter, an increase from $265.9 million for the first quarter of fiscal 2006. Income from continuing operations continuing operations
Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the first quarter of fiscal 2007 was $24.8 million, or $0.56 per diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, an increase from $13.9 million or $0.36 per diluted share in the prior-year first quarter. First quarter of fiscal 2006 included only two months of our Europe-based consulting operations due to the July 31, 2005 acquisition date. All of our business segments reported increased revenues and income as compared to prior-year first quarter. Comparable-period revenues were up 11% and diluted earnings per share diluted earnings per share
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were up 56%, as explained below. Our results for the quarter also include the dilutive effect Dilutive effect
Result of a transaction that decreases earnings per common share (EPS). of the 1.95 million contingent shares that we expect to issue related to the European European
emanating from or pertaining to Europe.
European bat lyssavirus
European beech tree
see cryptococcosis. acquisition. The contingent shares are not included in prior-year first quarter diluted earnings per share.
"These results highlight our growing strength in the marketplace," said John Haley John Haley former Little Rock lawyer, former attorney for Jim Guy Tucker and Jim Guy Tucker's co-defendant.
On February 20, 1998, John Haley pleaded guilty to one misdemeanor count tax fraud to the Internal Revenue Service. , president and chief executive officer. "After an impressive fiscal 2006, we continue to build momentum. Our results and our brand have never been stronger."
"Once again, we saw consistently positive results across all of our segments. In particular, our Investment Consulting and Technology and Administration Solutions segments - two areas we've targeted for growth - delivered truly outstanding results."
Comparable Period Results
Effective July 31, 2005, the company acquired the Europe-based consulting operations of Watson Wyatt LLP LLP - Lower Layer Protocol , its long-time strategic alliance partner. To provide comparability with prior-year first quarter, the company provides pro-forma results for the first quarter of fiscal 2006. The prior-year, pro-forma results have been prepared assuming that the company's acquisition of the European consulting business of Watson Wyatt LLP had occurred on July 1, 2005. Therefore, three months of the operations of Watson Wyatt LLP are included in the first quarter of both fiscal years. The company's management uses these prior-year pro-forma results internally to focus on period-to-period changes in the company's business and believes this information is helpful to shareholders. The prior-year, pro-forma numbers could also assist shareholders in assessing the impact of the acquisition of the European business by providing comparable prior-year information as a basis for comparison.
Revenues for the first quarter of fiscal 2007 were $336.0 million, an increase of 11% from prior-year, pro-forma revenues of $302.3 million. Earnings per diluted share of $0.56 for the first quarter increased 56% from $0.36 in the prior-year, pro-forma first quarter. For the quarter, exchange rates had a favorable fa·vor·a·ble
1. Advantageous; helpful: favorable winds.
2. Encouraging; propitious: a favorable diagnosis.
3. impact on comparable period revenues of approximately 2 percentage points and a positive impact of $0.01 per diluted share on comparable period net income.
Operating highlights are discussed on a GAAP GAAP
See: Generally Accepted Accounting Principles
See generally accepted accounting principles (GAAP). and a comparable period basis.
* Benefits Group revenues (representing 55% of first-quarter revenues) were $185.4 million for the first quarter of fiscal 2007, up from $157.0 million in the prior-year first quarter. Revenues increased 5% from prior-year, pro-forma revenues of $175.8 million. The increase in revenues for the quarter was largely due to increased demand for valuation and design work.
* Technology and Administration Solutions Group revenues (representing 11% of first-quarter revenues) were $37.2 million for the first quarter of fiscal 2007, up from $25.2 million in the prior-year first quarter. Revenues increased 25% from prior-year, pro-forma revenues of $29.8 million. The increase in revenues for the quarter was due primarily to an increase in the number of projects in service, on which revenues are recognized. At September 30, 2006, 58 projects were in service, as compared to 18 at September 30, 2005. The pipeline continues to be strong, with 65 projects in the implementation phase compared to 48 at September 30, 2005. Our European business also continues to perform well due to excellent client retention as well as new client wins.
* Human Capital Group revenues (representing 12% of total revenues for the quarter) were $39.6 million for the first quarter of fiscal 2007, up from $31.5 million in the prior-year first quarter. Revenues increased 17% from prior-year, pro-forma revenues of $33.7 million. Revenue growth continued to be driven primarily by demand for executive compensation consulting and data services.
* Insurance & Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. Group revenues (representing 8% of total revenues for the quarter) were $26.4 million for the first quarter of fiscal 2007, up from $15.4 million in the prior-year first quarter. Revenues increased 15% from prior- year, pro-forma revenues of $22.9 million. Our growth was due to significant project work and an expansion of our operations in Amsterdam.
* Investment Consulting Group revenues (representing 8% of total revenues for the quarter) were $27.4 million for the first quarter of fiscal 2007, up from $16.3 million in the prior-year first quarter. Revenues increased 36% from prior-year, pro-forma revenues of $20.1 million. Revenues increased during the quarter due to a strong demand for all of our services, particularly investment strategy advice.
Outlook for Fiscal Year 2007
For fiscal year 2007, the company expects revenues to be in the range of $1.40 billion to $1.43 billion, an increase from previous guidance of $1.38 billion to $1.40 billion. Earnings per diluted share for the year are expected to be in the range of $2.26 to $2.29, an increase from previous guidance of $2.15 to $2.20. The increase in guidance is based on the company's strong first quarter performance.
For the second quarter of fiscal 2007, the company expects revenue to be in the range of $345 million to $350 million. In addition, the company expects second quarter earnings per diluted share to be in the range of $0.44 to $0.46.
The company will host a live webcast and conference call to discuss the financial results for the first quarter of fiscal 2007. It will be held on Wednesday, November 8, 2006, beginning at 9:00 a.m. Eastern Time, and can be accessed via the Internet Internet
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by going to www.watsonwyatt.com. The replay of the webcast will be available two hours after the live call for a period of three months. The replay also will be available for one week after the call by dialing 617-801-6888 and using confirmation number 80481898.
Forward-Looking Statements forward-looking statement
A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections.
Statements in this press release regarding projections and expectations of future earnings, revenues, operations, business trends and other such items are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. A number of risks and uncertainties exist which could cause actual results to differ materially from the results reflected in these forward-looking statements. Such factors include but are not limited to the company's ability to integrate the business of Watson Wyatt LLP into our own business, processes and systems, and achieve the anticipated results; our continued ability to recruit and retain qualified associates; the success of our marketing, client development and sales programs after the business combination; our ability to maintain client relationships and to attract new clients after the business combination; declines in demand for our services; outcomes of pending or future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. and the availability and capacity of professional liability insurance to fund pending or future judgments or settlements; the ability of the company to obtain professional liability insurance; a significant decrease in the demand for the consulting, actuarial ac·tu·ar·y
n. pl. ac·tu·ar·ies
A statistician who computes insurance risks and premiums.
[Latin and other services we offer as a result of changing economic conditions or other factors; actions by competitors offering human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.)
service - work done by one person or group that benefits another; "budget separately for goods and services" , including public accounting and consulting firms Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee
business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , technology consulting firms and internet/intranet development firms; our ability to achieve cost reductions after the business combination; foreign currency exchange and interest rate fluctuations; exposure to Watson Wyatt LLP liabilities that have not been expressly assumed; general economic and business conditions that adversely affect us or our clients after the business combination; the level of capital resources required for future acquisitions and business opportunities; regulatory developments abroad and domestically that impact our business practices; legislative and technological developments that may affect the demand for or costs of our services; and other factors discussed under "Risk Factors" in the company's Annual Report on Form 10-K Form 10-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. for the year ended June 30, 2006 and filed on September 1, 2006, on file with the Securities and Exchange Commission. These statements are based on assumptions that may not come true. All forward-looking disclosure is speculative by its nature. The company undertakes no obligation to update any of the forward-looking information included in this report, whether as a result of new information, future events, changed expectations or otherwise.
About Watson Wyatt Worldwide
Watson Wyatt (NYSE:WW) is the trusted business partner to the world's leading organizations on people and financial issues. The firm's global services include: managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. and data services. Watson Wyatt has 6,360 associates in 30 countries and is located on the Web at www.watsonwyatt.com.
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