Robert Half International Inc
) is set to report its first-quarter 2013 results on Apr 23 after
the market closes. Last quarter, it posted a 2.4% positive
surprise. Let's see how things are shaping up for this
Growth Factors this Past Quarter
Strong revenue growth boosted by continued demand for
specialized staffing and consulting services, particularly in the
U.S. proved to be Robert Half's strength in the fourth quarter.
Further, the improving global economic condition has heightened
the demand for the company's temporary and permanent staffing
services and risk consulting and internal audit services.
Robert Half witnessed strong revenue growth in each of its
business segments. Earnings of 42 cents increased 40% from the
year-earlier quarter, marking the 11
straight quarter of more than 20% increase. Gross margin expanded
50 basis points to 40.3% in the quarter while operating margin
increased 200 basis points to 9.4% on the back of higher gross
margins, lower operating expenses and solid perfrmance of the
company's wholly-owned subsidiary, Protiviti. However, currency
headwinds and a tough job scenario, particularly in Europe,
resulted in soft demand for recruitment services.
Our proven model does not conclusively show that Robert Half
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive earnings Expected Surprise
Prediction (ESP) (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, #2 or #3 for this to happen. That is not
the case here as shown below.
The Earnings ESP is 0.00%.
Zacks Rank #3 (Hold):
Robert Half's Zacks Rank #3 (Hold) lowers the predictive power of
ESP because the Zacks Rank #3 when combined with an ESP of 0.00%
makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and #5 (Sell
rated stocks) going into the earnings announcement, especially
when the company is seeing negative estimate revisions
Other Stocks to Consider
Here are some other companies in the business services sector
you may want to consider as our model shows they have the right
combination of elements to post an earnings beat this
AMN Healthcare Services
) with Earnings ESP of +8.33% and a Zacks Rank #2 (Buy)
) with Earnings ESP of +2.70% and a Zacks Rank #2 (Buy)
) with Earnings ESP of +1.14% and a Zacks Rank #3 (Hold)
AMN HLTHCR SVCS (AHS): Free Stock Analysis
PAYCHEX INC (PAYX): Free Stock Analysis
ROBT HALF INTL (RHI): Free Stock Analysis
STERICYCLE INC (SRCL): Free Stock Analysis
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