Oppenheimer Has Perform Rating On Resources Connection Inc. (RECN)

Oppenheimer & Co. has a Perform rating on shares of Resources Connection Inc. RECN. In a note sent to clients, Oppenheimer writes, "F2Q11 adj'd EPS of $0.09 exceeded our estimate/consensus of $0.08/$0.07, respectively. Reported EPS of $0.38 included a $0.30 benefit from an earn-out fair value adjustment and ($0.01) from a tax valuation allowance. Revenue of $138.5M (+14% y/y) exceeded our estimate/consensus of $132M/$133.8M. F2Q11 gross and operating margins improved y/y, as RECN has room to grow revenue into its existing structure. RECN noted broad based geographic and practice strength, particularly in the financial services vertical of Finance & Accounting, as well as in Information Management and Supply Chain Management. However, sustained top-line growth remains uncertain, as clients budgets remain tight. We anticipate revenue continuing to build at a measured pace, though await enhanced certainty of sustainability." Shares of RECN gained 41 cents yesterday to close at $18.95.