LECG Corp. lowers Q4 guidance
LECG Corp. (Nasdaq: XPRT), lowered fourth-quarter earnings and revenue guidance due to a restructuring charge from the completion of the company’s recovering value plan and a loss associated with the divestment of its subsidiary, Silicon Valley Expert Witness Group.
For the three months ended Dec. 31, 2007, the provider of economic and financial analysis, expert testimony, litigation support and strategic management consulting said it now expects to clock a loss per share in the range of $0.10 to $0.11, which includes restructuring charges of $0.16 per share associated with the completion of the company's recovering value plan and a loss from the disposition of it subsidiary of $0.08 per share.
Excluding these charges, the small cap forecasts a profit in the range of $0.13 to $0.14 per share, down from a previously projected range of $0.24 to $0.26 per share.
The variance in income per share compared with guidance is a direct result of the revenue shortfall, according to LECG.
Fourth-quarter revenues are now estimated to be in the range of $87 million to $89 million, which excludes $2.7 million in revenues from the company's subsidiary that was divested on Dec. 31, 2007. Including revenue from discontinued operations, total revenues for the quarter are estimated to be in the range of $90 million to $92 million, still down from LECG’s previous revenue outlook of $95 million to $98 million.
The consensus of two analysts polled by Thomson Financial was for earnings of $0.25 per share on revenues of $95.73 million.
The small cap also noted that it experienced greater seasonality than normal in December and that more vacation taken over the holidays, particularly in Europe, also contributed to the firm’s lowered expectations.
“The most surprising part of the company’s results was the drop in the vacation time used by consultants,” said William Blair analyst Tim McHugh in a phone interview. “LECG had better-than-expected results in the third quarter due in part to lower than normal use of vacation time, which may have caused a spillover of that into the December time period. The magnitude of the earnings decline certainly increases uncertainty about the company’s demand environment and ongoing revenue run rate.”
In light of the company’s lowered guidance, McHugh lowered his 2008 EPS estimate by $0.20 to $0.80. The mean estimate of two analysts surveyed by Thomson Financial is for earnings of $1.04 per share in 2008.
Shares of LECG Corp. (XPRT) cratered lower by 30.22%, or $3.72, to $8.59 on above average volume of 617,252 at 10:06 a.m. ET. Shares of LECG Corp have been trading in the range of $8.40 and $18.16 for the past 52 weeks. The average volume for LECG shares is 173,065.
