Watson Wyatt Worldwide, Inc. (WW) is seeing upbeat estimates and a rising share price ahead of its earnings announcement in early May. The company has been beating the market with a 20% gain over the past 3 months. Analysts’ fiscal year earnings projections are up 2% in that time frame.

Company Description

Watson Wyatt Worldwide, Inc. is a global consulting firm. Its services include managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,000 associates in 32 countries.

Strong Fundamentals

The company carries low levels of debt and offers a return on equity (ROE) of 18%, beating the industry average of 11%. The company’s net profit margin of 9% also tops the industry average of 4%. Watson Wyatt pays an industry-leading dividend yield of 0.6%.

Analysts’ fiscal year earnings projections are up 2% over the past 3 months. The company’s fiscal third-quarter results are scheduled for realse on May 7.

Solid Earnings

The company’s second-quarter earnings of 93 cents came in 21% ahead of the consensu estimate.

“We’re pleased to have achieved year-over-year earnings growth this quarter, in light of the economic and foreign currency headwinds,” said John Haley, president and chief executive officer. “All of our segments grew on a constant currency basis, with strong performance in our insurance & financial services, technology & administration solutions and benefits groups. Our balance sheet and cash flow remain strong.

The company has an outstanding record of outpacing analysts’ earnings forecasts, delivering only 1 consensus match and no misses over the past 4 years. During the past 4 consecutive quarters, WW surpassed analysts’ earnings expectations by an average of 14%.

The company’s share price has been soaring on the strong earnings, lately outperforming the market with a 20% gain.

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