Personal Finance
KFY

Why Korn/Ferry Stock Just Jumped 13%

Join Our Team written on post-it notes

What happened

Shares of international headhunting and consulting firm Korn Ferry International (NYSE: KFY) surged nearly 21% in early trading Wednesday, and they remain up 12.8% as of 12:35 p.m. EDT in the wake of strong earnings .

Announcing the close of its fiscal year 2018 this morning, Korn Ferry reported Q4 profits of $0.73 per share and "adjusted" profits of $0.80 -- beating Wall Street's estimated $0.70-per-share profit by either measure. Q4 sales of $488.4 million likewise exceeded expectations for sales of $454.4 million.

Join Our Team written on post-it notes

Investors are happy to climb on board Korn Ferry stock today. Image source: Getty Images.

So what

Q4 sales results were up 17% year over year and capped a fiscal year that saw Korn Ferry grow its sales 13% overall, to $1.8 billion. CEO Gary Burnison observed that this was "the highest fiscal year fee revenue in our firm's history." Profits were none too shabby, either, growing 55% for the quarter, and 60% for the full year, with Korn Ferry booking a grand total of $2.35 per share in profit for fiscal 2018.

Now what

Guidance-wise, Korn Ferry did not say whether it expects this year to be as good as last, limiting its comments to just the immediate future of fiscal Q1 2019. Here, management is looking for about a 15% bump up in sales to between $450 million and $470 million in the new fiscal year's first quarter.

One surprise: Management expects to book a big quarterly loss of between $0.66 and $0.74 per share in Q1, versus the $0.51 per share profit it earned in last year's Q1. Korn Ferry explained that it will be taking "a one-time, non-cash intangible asset impairment charge of $106 million, or $79 million on an after-tax basis" to account for rebranding its entire business simply as "Korn Ferry," and "sunsetting ... all the Company's sub-brands, including Futurestep, Hay Group and Lominger, among others."

Investors don't seem to mind this caveat one bit.

10 stocks we like better than Korn/Ferry International

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Korn/Ferry International wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of June 4, 2018

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

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.

In This Story

KFY

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More