Earnings Preview: Manpower - Analyst Blog
17 Aprile 2012 - 1:15PM
Zacks
ManpowerGroup
(MAN), the global leader in the employment services industry, is
scheduled to report its first-quarter 2012 financial results on
Friday, April 20, 2012.
The current Zacks Consensus
Estimate for the quarter is 35 cents a share, which reflects a
decline of 18.6% from the prior-year quarter’s earnings of 43
cents. The estimates in the current Zacks Consensus range between a
low of 32 cents and a high of 37 cents a share. The Zacks Consensus
estimates revenue at $5,001 million for the first quarter.
Recap of Fourth-Quarter
2011
On February 1, 2012, Manpower
delivered fourth-quarter 2011 results. The company posted
better-than-expected fourth-quarter 2011 results on the back of
revenue growth with emerging markets portraying robust trends, in
particular Asia. Better expense control also provided cushion to
the bottom line.
However, Manpower projects a
cautious outlook for first-quarter 2012. The company warned that
the softness in the current economic environment is likely to
persist in 2012. Management alarmed that the ongoing turmoil in
Europe could be a potential threat to job creation.
The quarterly earnings of 98 cents
a share beat the Zacks Consensus Estimate of 87 cents and soared
48.5% from 66 cents earned in the prior-year quarter.
Milwaukee, Wisconsinbased Manpower,
said that total revenue for the quarter rose 5.3% to $5,484 million
from the prior-year quarter, and 5.8% in constant currency.
However, the quarterly revenue fell short of the Zacks Consensus
Estimate of $5,560 million.
Guidance
Manpower now expects first-quarter
2012 earnings in the range of 30 cents to 38 cents a share,
including an unfavorable impact of foreign currency translation of
2 cents.
(Refer the article: Manpower Beats
on EPS, Stays Wary)
Zacks Agreement &
Magnitude
No movement was noticed in the
Zacks Consensus Estimate for the first quarter either in the last
30 or last 7 days, since none of the 13 analysts covering the stock
revisited their estimates.
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 2.1% to 34.4%. The average remained at
14.8%. This suggests that Manpower has beaten the Zacks Consensus
Estimate by an average of 14.8% in the trailing four quarters.
Given its past performance we expect the company to outperform the
Zacks Consensus Estimate.
Manpower is
Neutral
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 3,800 offices, spanning 80 countries and serving
approximately 400,000 clients. It benefits from growth prospects in
under-penetrated staffing markets.
However, Right Management continues
to struggle due to an 8% (in constant currency) fall in the
counter-cyclical outplacement business during the fourth quarter of
2011. Revenue from Right Management services dropped 8.2% to $79.8
million and 8.6% in constant currency. Management now anticipates
Right Management business to be down between 7% and 9% in constant
currency in the first quarter of 2012.
We currently maintain our long-term
“Neutral” recommendation on the stock. However, Manpower, which
competes with Kelly Services Inc. (KELYA), holds a
Zacks #1 Rank that translates into a short-term “Strong Buy”
rating, and well defines the company’s strategy of exiting lower
margin business and venturing into high margin business in the
coming quarters.
KELLY SVCS A (KELYA): Free Stock Analysis Report
MANPOWER INC WI (MAN): Free Stock Analysis Report
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