Staffing firm On Assignment Inc. said its first quarter net income fell 31 percent because of a drop in demand for staffing services in the health care and life sciences industries.

Profits beat expectations, but the company gave second quarter guidance that was lower than Wall Street anticipated.

After Thursday's market close, the company reported net income of $1.6 million (5 cents per share), compared with $2.4 million (7 cents) a year ago. Revenue fell 23 percent to less than $117 million.

The results included a non-cash expense of $580,000 related to the change in its medical malpractice insurance and a gain of $660,000 on the company's $73 million interest rate swap.

Analysts surveyed by Thomson Reuters on average expected the company to earn 3 cents per share on revenues of more than $121 million.

Looking ahead, the company, which also staffs technology and engineering companies, expects second quarter per-share earnings of 1 to 4 cents on revenues of $105 million to 108 million. Analysts currently expect per-share earnings of 5 cents on revenue of more than $120 million.

"Although we anticipate demand to be weak in the near term, we are beginning to see signs that demand may be improving and that revenues for the second quarter could be the low water mark for the year," Chief Executive Peter Dameris said in a statement.

On Assignment shares were up 14 cents, or 4 percent, to $3.66 in midday trading on the Nasdaq.

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