Towers Watson Beats Q3 Estimates, Raises Earnings Outlook

reported better-than-expected results for the fiscal third quarter and lifted its earnings forecast for the full year. The Arlington, Virginia-based company posted quarterly income from continuing operations of $104 million, or $1.49 per share, compared to $102 million, or $1.39 per share, in the year-ago period. Excluding items, the company's adjusted diluted earnings per share from continuing operations came in at $1.63 per share. Its revenue gained 2 percent year-over-year to $920.7 million. Analysts were expecting a profit of $1.50 per share on revenue of $902.1 million. The average estimate among 3 Estimize users was for earnings of $1.50 per share and revenue of $902.26 million. For the quarter, revenue from the Benefits segment slipped 1 percent to $496 million in the third quarter, while the Exchange Solutions segment's revenue climbed 31 percent to $97 million. For the quarter, revenue from the Risk and Financial Services segment dropped 10 percent to $156 million, while revenue from the Talent and Rewards segment jumped 10 percent to $140 million. EBITDA margin widened to 22 percent from 20 percent. "We are very pleased with our third quarter results. Healthcare and pension consulting as well as pension administration drove revenue growth in the Benefits segment. Talent and Rewards delivered its strongest quarter in almost four years due to the high level of global M&A activity, and Exchange Solutions continued to exceed expectations, as demand for retiree exchange and healthcare administration remained strong," said John Haley, Towers Watson's chief executive officer. For the full year, Towers Watson projects earnings of $6.03 to $6.10 per share, on revenue of $3.6 billion. The company had earlier expected earnings of $5.90 to $6.00 per share. Towers Watson shares gained 1.67 percent to close at $131.63 yesterday.