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Tuesday, Oct 3, 2023

Resources Connection Posts Unexpected Loss, Lower Revenue

Irvine-based Resources Connection Inc., a provider of accountants, lawyers and other professionals to companies on a project basis, reported an unexpected loss and lower sales for its recently ended quarter.

For the three months through Nov. 28, Resources saw a loss of $1.9 million, versus a profit of $9.5 million a year earlier.

Wall Street analysts on average were expecting a profit of about $1 million.

Revenue was down 36% from a year earlier to $121 million.

Analysts were looking for sales of $124 million.

Revenue was up 2.7% from the prior quarter.

“It is gratifying to see sequential improvement in our quarterly revenue,” said Tony Cherbak, the company’s chief operating officer.

The company’s business has been hit by corporate retrenching, which has cut projects and the need for outside consultants.

Many expect the company to benefit from an economic rebound as companies tap consultants before making full-time hires. But that has been slow to realize.

U.S. revenue was down 35% from a year earlier and down 0.7% from the prior quarter.

Global revenue was down 39% from a year earlier and up 12.5% from the prior quarter.

Resources recently expanded by acquiring Los Angeles-based crisis public relations firm Sitrick and Co. and restructuring consultant Brincko Associates Inc. of Riverside for $43 million in cash and stock.

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