Hewitt reports lower profit in 1st quarter

LINCOLNSHIRE, Ill.--Hewitt Associates Inc. reported slightly higher net revenues and lower profits for the first quarter of its 2007 fiscal year.

Net revenues, which exclude reimbursement paid by clients for certain expenses incurred by Hewitt, climbed 4% in the first quarter to $726.6 million. Net income fell 5% to $30.1 million. Net income was negatively impacted by a $16 million pretax severance charge as Hewitt reduced staff in its outsourcing and administrative and support areas.

Lincolnshire, Ill.-based Hewitt's fiscal year begins Oct. 1.

By business segment, outsourcing revenues increased 2% to $520.8 million, while consulting revenues climbed 10% to $214.9 million. The growth was largely due to greater demand for retirement and communications consulting services.

Russell P. Fradin, who took over last year as Hewitt's chairman and chief executive officer, said the results "reflect strong underlying growth driven by the solid performance of both outsourcing and consulting."

Separately, Hewitt's board of directors authorized the company to repurchase up to $750 million of its common shares over the next 24 months.