CRA's Shares Plummet on Forecast

The Boston-based company said Friday it expects revenue of $86 million for the fiscal first quarter, which ended in mid-February, compared with analysts' expectations for revenue of $92 million.

CRA International's forecast for profit of $3 million to $3.2 million, or 26 cents per share to 28 cents per share, also missed expectations of 58 cents per share. The company withdrew its forecast for the year.

CRA's consultants charge hourly fees to advise on things like economics, corporate takeovers and new product launches.

While business in the U.S. is fine, the company's "utilization rate" internationally is shrinking. The utilization rate refers to how many of the company's 770 consultants are working.

The utilization rate compressed to 70 percent from 74 percent in the first quarter, the company said.

At the end of the fourth quarter, CRA said some big oil deals came to a close. Piper Jaffray analyst Randy L. Hugen speculated the consultants on those deals were not redeployed, which would be enough to yank down the utilization rate 4 percentage points.

James Janesky, an analyst with Stifel Nicolaus, downgraded CRA to "Hold" from "Buy." Janesky said he has lost confidence in CRA after "an extended period of poor execution by management."

Based on results at competitors like Huron Consulting Group Inc., demand for consulting is still robust, he said.

Janesky said CRA has bought a lot of smaller companies in the past decade. The complex organization that has resulted made it more difficult for management to pace costs with revenues, he said.

CRA's stock plunged $15.93, or 41.8 percent, to $22.23. The stock sank as low as $22.11, the cheapest trade since 2003.