Earnings Preview: Manpower - Analyst Blog
19 Avril 2011 - 10:45AM
Zacks
Manpower Inc.
(MAN), the global leader in the employment services industry, is
scheduled to report its first-quarter 2011 financial results before
the bell on Thursday, April 21, 2011. The current Zacks Consensus
Estimate for the quarter is 32 cents a share. For the quarter under
review, revenue is $4,897 million, according to the Zacks Consensus
Estimate.
Fourth-Quarter 2010, a
Synopsis
On February 2, 2011, Manpower
posted fourth-quarter 2010 results that topped the Zacks estimates
on the heels of revenue growth across all geographies with Europe
performing remarkably well.
The quarterly earnings of 66 cents
a share outpaced the Zacks Consensus Estimate of 61 cents and rose
40.4% from 47 cents earned in the prior-year quarter. The foreign
currency fluctuation negatively impacted net earnings by 2 cents a
share. Net earnings for the quarter under review also surpassed
management’s guidance range of 54 cents to 62 cents a share.
Milwaukee, Wisconsin-based Manpower
said that total revenue for the quarter soared 18.1% to $5,209.6
million from the prior-year quarter, and 22.1% in constant
currency. The quarterly revenue also came well ahead of the Zacks
Consensus Estimate of $5,101 million.
Guidance
Manpower now expects first-quarter
2011 earnings in the range of 26 cents to 34 cents a
share.
First-Quarter 2011
Consensus
Analysts surveyed by Zacks, expect
Manpower to post first-quarter 2011 earnings of 32 cents a share
that remains at the high-end of the company’s guidance range. The
current Zacks Consensus Estimate compares with 4 cents a share
earned in the year-ago quarter. The estimates in the current Zacks
Consensus for the quarter range from a low of 30 cents to a high of
35 cents.
Zacks Agreement &
Magnitude
Of the 14 analysts following the
stock, one analyst raised the estimate and another analyst lowered
the estimate in the last 30 days having no material impact on the
Zacks Consensus Estimate. In the last 7 days, only one analyst
revised the estimate upwards with none chopping their estimates,
thereby keeping the Zacks Consensus Estimate unchanged.
Positive Earnings
Surprise History
With respect to earnings surprises,
Manpower has topped the Zacks Consensus Estimate over the last four
quarters in the range of 8.2% to 157.1%. The average remained at
69.8%. This suggests that Manpower has beaten the Zacks Consensus
Estimate by an average of 69.8% in the trailing four quarters.
Given the past performance we expect the company to outperform the
Zacks Consensus Estimate.
Manpower in Neutral
Lane
Manpower’s comprehensive range of
services makes the company a truly global staffing firm. The
company provides services for the entire employment and business
cycle including permanent, temporary and contract recruitment,
employee assessment and selection, training, outplacement,
outsourcing and consulting.
The company’s brand value and
strong global network provide a competitive advantage to the
company and reinforces its dominant position in the market.
Manpower leverages a strong network of about 4,000 offices spanning
across 82 countries and serving approximately 400,000 clients. The
company benefits from growth prospects in under-penetrated staffing
markets.
Manpower also witnessed that with
the improvement in the economic conditions, the company’s staffing
business is also stabilizing. However, Manpower’s Right Management
brand continues to struggledue to a fall in demand for the
counter-cyclical outplacement services. Revenue from Right
Management services plunged 32.9% to $87 million and 32.4% in
constant currency in fourth-quarter 2010. Management expects the
Right Management business to decline between 21% and 23% in
first-quarter 2011 in constant currency.
Given the pros and cons, we prefer
to maintain a long-term ‘Neutral’ rating on the stock. Moreover,
Manpower, which competes with Kelly Services Inc.
(KELYA) holds a Zacks #3 Rank, translating into a short-term ‘Hold’
rating.
KELLY SVCS A (KELYA): Free Stock Analysis Report
MANPOWER INC WI (MAN): Free Stock Analysis Report
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