(WW) - 38.1% positive surprise - analysts have bumped up their earnings estimates

Watson Wyatt Worldwide, Inc. (WW) met or exceeded analysts' earnings expectations in 12 straight quarters. This Zacks #1 Rank stock recently reported solid fourth quarter and fiscal-year 2006 results. Earnings per share are forecasted to grow 12.3% over the next 3-5 years. The company's return on equity tops that of the industry average—17% compared to 13%. Full Analysis Watson Wyatt Worldwide, Inc. provides consulting services mainly in the areas of employee benefits and compensation, human capital and human resource-related technology. WW exceeded analysts' earnings expectations for the past 12 quarters. During that time, the company surprised to the upside on 11 occasions and met once. Earnings per share grew 6.7% over the past five years and are projected to nearly double going forward—12.3% over the next 3-5 years. On Aug 10, the company posted fourth-quarter fiscal 2006 profits of $25.7 million, or 58 cents per share. This amounted to a 38.1% positive surprise and bettered earnings in the prior-year period by 16.0%. The quarter's impressive earnings surprise comes after WW crushed the Street's third-quarter estimate by 50.0%. Revenues in the fourth quarter were $347.1 million, up 74.8% when compared to the fourth quarter of fiscal 2005. For the entire fiscal year, profits soared 67.1% to $87.2 million. Revenues ballooned 72.3% to $1.27 billion. President and Chief Executive Officer John Haley stated, "All segments generated revenue growth in the fiscal year, with double-digit increases in Insurance and Financial Services, Investment Consulting, and Technology and Administration Solutions. And demand should remain robust, as various regulatory and accounting changes take shape." Since the release of its fourth-quarter and fiscal-year results, analysts have bumped up their earnings estimates. The consensus estimate for the first quarter of fiscal 2007 increased 9.5% to 46 cents over the past week. For the entire fiscal year, profit forecasts jumped 5.9% to $2.16. The Board of Directors authorized the repurchase of up to 1.5 million shares of the company's class A common stock. These shares are on top of the 488,534 shares that the company can still buy back under its previous authorizations. In mid May, the Board declared a quarterly dividend of 7.5 cents per share, leading to a current dividend yield of 0.85%. WW's return on equity, a common measure of a company's profitability, tops that of the industry average—17% compared to 13%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home