The company's operating income rose 32% to $8.4 million. This was a bit worse than the $10 million in Q4 05. Heidrick said that this was because costs rose according to plans.
Heidrick made a point of confirming guidance for the full-year 2006. This is for revenue to be $445 to $465 million with a 12% margin. But, at the low end, the revenue growth would only be 8% over 2005.
Heidrick's business has shown good growth over the last few years, although, in theory, it should be pressured by companies like Monster (NASD:MNST). Revenue at the search firm has moved up from $318 million in 2003, when the company had an net loss of $80 million, to $433 million last year.
But, revenue growth seems to have slowed of late. In the December 2005 quarter, revenue was $112 million compared to $114 in the period ending in September. And, now, revenue has dropped again.
Heidrick will have to demonstrate that two quarters of shrinking revenue does not a trend make, or it is in for a long 2006.
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Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He is also the former president of Switchboard.com, which was the 10th most visited site in the world at the time, according to MediaMetrix. He has been chief executive of FutureSource LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. He can be reached at firstname.lastname@example.org.