Earnings from consulting agency Exponent (EXPO -13.30%) got here in beneath expectations, and the corporate continues to see challenges heading into 2024. Buyers are transferring to the sidelines, sending shares of Exponent down 15% as of 10:45 Japanese Friday.
The expansion engine is sputtering heading into 2024
Exponent is an engineering and tech consulting agency, providing experience in about 90 technical disciplines to corporations all over the world. However with so lots of these prospects trying to trim prices on account of issues in regards to the macro surroundings, the final three months proved tougher for Exponent than analysts had hoped.
The corporate reported fourth-quarter earnings of $0.41 per share on income of $122.9 million, in comparison with Wall Avenue expectations for $0.44 per share in earnings on gross sales of $119 million. Income was up 7% 12 months over 12 months, led by features in its engineering and science phase. The smaller environmental and well being phase, which represents simply 16% of income within the fourth quarter, noticed gross sales drop by 3% on account of consumer finances constraints.
Wanting forward, Exponent mentioned it expects income to be flat to down by low single digits within the first quarter and for all of 2024.
“Constrained budgets and challenge delays stemming from ongoing macroeconomic uncertainty are impacting litigation in addition to proactive work, and we are going to proceed to face headwinds within the client electronics sector,” CEO Catherine Corrigan mentioned in an announcement.
Is Exponent a purchase after its earnings miss?
The information wasn’t all dangerous for Exponent shareholders. The corporate is boosting its quarterly dividend by $0.02 per share to $0.28, its eleventh consecutive 12 months growing the payout. The board additionally elevated Exponent’s inventory repurchase authorization by $61.6 million to $100 million.
Exponent is producing loads of money. In 2023, the corporate paid out $54 million in dividends and repurchased $24.2 million price of widespread inventory and nonetheless ended the 12 months with a money stability of $187.2 million, 15% larger than the tip of 2022. Over the previous 5 years, Exponent has now decreased its share rely by simply over 4%.
The corporate seems to be doing high-quality, however with finish markets sluggish, that is to be a 12 months of retrenchment and never a 12 months of development. For income-focused buyers with the persistence to trip out the macro headwinds, now might be a superb time to offer Exponent shares a glance.
Lou Whiteman has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Exponent. The Motley Idiot has a disclosure coverage.
