Huron Consulting Q2 profit rises; may breach covenants
Mon Aug 17, 2009 6:06pm EDT
* Q2 profit beats estimates
* Says may record non-cash goodwill impairment charge
* Says charge may force non-compliance with covenants
Aug 17 (Reuters) - Huron Consulting Group Inc (HURN.O), whose shares plunged in the wake of an accounting scandal, posted a second-quarter profit above analysts' expectations, helped by higher revenue from its health and education consulting segment.
The company said in a regulatory filing that due to significant decline in its stock price, it may record a non-cash goodwill impairment charge for the quarter ending Sept 30, leading to non-compliance with the financial covenants in its credit agreement.
Huron said its debt under the credit agreement totaled $295 million as of June 30 and goodwill balance stood at $506.5 million.
Earlier this month, the company's entire top management quit as it said it would restate more than three years of results, slashing its profits by almost half because it misreported costs related to acquisitions.
For the second quarter, Huron earned $9.6 million, or 47 cents a share, compared with restated earnings of $1.1 million, or 6 cents a share, a year ago.
Revenue rose 16 percent to $165.8 million.
Analysts on average had expected earnings of 45 cents, excluding items, on revenue of $166.4 million, according to Reuters Estimates.
Shares of the company rose 66 cents at $14.35 in trading after the bell. The stock closed at $13.69 Monday on Nasdaq. (Reporting by Supantha Mukherjee in Bangalore; Editing by Maju Samuel)
