How Manpower Balances? - Analyst Blog
23 Décembre 2011 - 3:15PM
Zacks
The job market is stubbornly
fragile and the economy exceptionally bleak. But in the age of
survival of the fittest, one has to face headwinds, balance itself
and keep its head high, while passing through every rough patch.
This is exactly what ManpowerGroup (MAN) is
doing.
Manpower’s comprehensive range of
services makes it a true 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 provides it a competitive advantage and
reinforces its dominance in the market. Manpower leverages a strong
network of about 3,900 offices, spanning 80 countries and serving
approximately 400,000 clients. It benefits from growth prospects in
under-penetrated staffing markets.
Earlier, Manpower had posted
better-than-expected third-quarter 2011 results that topped the
Zacks’ expectation on the heels of revenue growth across all
regions with emerging markets portraying robust trends. Better
expense control also lent support to the bottom line.
However, a fall in demand for the
counter-cyclical outplacement services continues to impact the
results. The company also cautioned that the softness in the
current economic environment is likely to persist in 2012. To
counter this, the company is contemplating on exiting lower margin
businesses and venturing in high margin carrying businesses in the
coming quarters. The company continues to register robust demand
for Experis’ end solution offerings.
The quarterly earnings of 97 cents
a share beat the Zacks Consensus Estimate of 95 cents and soared
56.5% from 62 cents earned in the prior-year quarter. The foreign
currency fluctuation favorably impacted net earnings by 8 cents a
share.
Net earnings for the quarter under
review dovetails with management’s guidance range of 90 cents to
$1.00 per share.
Milwaukee, Wisconsinbased Manpower
said that total revenue for the quarter soared 16.3% to $5,782.3
million from the prior-year quarter, and 8.8% in constant currency.
However, the quarterly revenue fell short of the Zacks Consensus
Estimate of $5,842 million.
Manpower, which competes with
Kelly Services Inc. (KELYA), now expects
fourth-quarter 2011 earnings in the range of 85 cents to 95 cents a
share, including a favorable impact of foreign currency translation
of 3 cents but excluding reorganization-related charges of 15 cents
to 20 cents. Management has projected a total revenue growth of 5%
to 7% in constant currency for the quarter.
However, Manpower’s Right
Management brand continues to struggle due to a drop in demand for
the counter-cyclical outplacement services. Revenue from Right
Management services plunged 9.5% to $77.5 million and 13.6% in
constant currency for the third quarter. The quarter is generally a
seasonally slow one for the Right Management, which posted an
operating loss of $1.9 million. Management expects Right Management
business to decline between 8% and 10% in the fourth quarter of
2011 in constant currency.
The above analysis supports our
long-term “Neutral” stance on ManpowerGroup, the global leader in
the employment services industry. Moreover, the company also holds
a Zacks #3 Rank that translates into a short-term “Hold” rating and
correlates with our long-term outlook.
KELLY SVCS A (KELYA): Free Stock Analysis Report
MANPOWER INC WI (MAN): Free Stock Analysis Report
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