Chicago-based Huron Consulting Group reported that its 2014 operating income and revenue improved over 2013 as its healthcare business buoyed weak results in other divisions.
Operating income rose 2.6% for the year to $123 million from $119.9 million for 2013. Revenue increased 12.6% to $811.3 million in 2014. Fourth-quarter operating income, however, fell 29.8% to $25.9 million in the fourth quarter of last year, compared with the same quarter in 2013. Fourth-quarter revenue decreased 8.6% to $193.1 million.
Huron CEO James Roth said the company's healthcare, education and life sciences and business advisory segments had strong fourth quarters “that put Huron in position to execute our growth and profitability strategies for 2015.”
“Huron Healthcare, our largest segment, continues to have a strong track record of winning assignments that involve large hospital systems and academic medical centers where the size and degree of complexity are a perfect fit for our competencies,” Roth said during a call with analysts to discuss the results. “The recent acquisition of Studer Group also enhances our healthcare strategy and adds a tremendously talented group of people to our already highly reputable healthcare practice.”
Huron closed on the Studer acquisition Feb. 12, so it didn't factor into fourth-quarter results. The acquisition of Vonlay, a Madison, Wis.-based healthcare technology consulting firm, closed May 5 and added $20 million in revenue for the fourth quarter.
Huron Healthcare finished 2014 with a 12.1% increase in operating income compared with 2013, rising to $159 million, and its revenue increased 15.9% to $414.8 million. This occurred despite sharp fourth-quarter decreases. Operating income fell 17.5% to $41.6 million and revenue decreased 4.1% to $109.5 million.
Huron CFO C. Mark Hussey explained in the call that the decline in income was partly due to higher salaries and bonuses.
Huron Healthcare accounted for 51% of the company's business, followed by legal, 23%; education and life sciences, 18%; and business advisory, which includes its enterprise performance management and analytics practice, 8%.
The company is forecasting revenue between $880 million and $920 million for 2015. Earnings are projected to be between $169 million and $180 million.
Roth predicted “mid single-digit” growth for the healthcare sector. The legal sector was projected to have a midteen reduction in revenue. He added that the legal sector's infrastructure would be actively restructured and would include “headcount reductions.”
The Studer Group acquisition was financed with $323 million in cash and credit and $2 million in Huron common stock, according to Huron's annual report filed with the Securities and Exchange Commission.
Huron's stock closed at $74.47 for Tuesday. Its highest recent price was $77.89 recorded Jan. 29 and its lowest in the past 365 days was $57.76 recorded April 14, 2014.
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