UPDATE 1-Hewitt Associates Q3 results beat Street, ups FY08 view
(Recasts, adds analysts' comments, updates share movement)
By Amulya Nagaraj
BANGALORE Aug 5 (Reuters) - Human resource services company Hewitt Associates HEW.N posted better-than-expected quarterly results, helped by growth at two of its largest segments, and raised its 2008 profit outlook for the second time this year, sending its shares up 14 percent to a lifetime high.
The company, which saw sales growth at its benefits outsourcing and consulting segments, also halved its losses in its human resources business process outsourcing (HR BPO) segment to $16.2 million.
"It is probably right now the most significant improvement because, if you go back over the last 12 months or so, they have lost roughly around 60 cents to 70 cents in EPS in that business (HR BPO)," Stifel Nicolaus analyst Shlomo Rosenbaum said from Baltimore. He has a "hold" rating on the stock.
Various factors including increased profitability of the company's clients and renegotiation of certain contracts helped cut back losses faster than expected, analyst Mark Marcon of Robert W. Baird said.
He added that company is also benefitting from various legislations like the Pension Protection Act of 2006.
The law helped the company's retirement consulting business, which forms a little more than a third of Hewitt's consulting segment. The consulting segment offers services related to retirement and health among others.
FY08 OUTLOOK RAISED Continua...