UPDATE 2-Korn/Ferry posts slimmer-than-expected Q1 loss, shrs up

* Q1 adj loss $0.05/shr vs est loss of $0.06/shr

* Total revenue falls 43 pct

* Says labor markets remain uncertain

* Shares open up 11 pct (Recasts; adds details, share movement)

Sept 9 (Reuters) - Executive search firm Korn/Ferry International (KFY.N) posted a quarterly loss that was a cent narrower than market estimates, helped by lower expenses, but said the economic crisis continues to have a significant impact on many of its clients' hiring plans.

Shares of Los Angeles-based Korn/Ferry opened up 11 percent, before paring some gains to trade up 8 percent at $14.38 in early trade on the New York Stock Exchange.

Korn/Ferry, which competes with Heidrick & Struggles International Inc (HSII.O), said although demand for its services began to stabilize in the first quarter, the macroeconomic climate and labor markets remain uncertain.

A recent survey of about 28,000 U.S. companies had shown that employers plan to hire fewer workers in the last three months of 2009 than in the current quarter. [ID:nN08275600]

Demand for executive searches and leadership and talent consulting services has declined precipitously throughout the world during the second half of fiscal 2009, the company said.

Korn/Ferry expects fee revenue of about $110 million to $120 million in the second quarter, based on new business confirmed subsequent to the end of the first quarter and on anticipation of a drop in new business due to summer seasonality.

The company, which operates throughout the Americas, Asia Pacific, Europe, the Middle East and Africa, had recorded fee revenue of $189.3 million in the year-ago second quarter.

Given the uncertain economic environment and labor markets, making a meaningful prediction about earnings remains impractical, the company said in a statement.

SWINGS TO Q1 LOSS

For the first quarter ended July 31, the company posted a net loss of $14.3 million, or 33 cents a share, compared with net income of $15.9 million, or 36 cents a share, a year ago.

Excluding a restructuring charge, the company posted a loss of 5 cents per share.

Total revenue fell 43 percent to $123.3 million in the quarter. Fee revenue also fell 43 percent to $116.8 million, including the impact of exchange rates.