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

CRA International Inc.CRAI 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 , Switch SWCH and Worldpay WP . 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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