Manpower Posts Robust Q4 Earnings - Analyst Blog

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Strong performance across all major regions, along with effective cost management have enabled ManpowerGroup Inc. ( MAN ) to come up with better-than-expected fourth-quarter 2013 results. The company's adjusted quarterly earnings per share (EPS) were $1.48, which handily beat the Zacks Consensus Estimate of $1.26 and rose 63.0% year over year.

However, including one-time items, EPS came in at $1.25, up 84.0% from the prior-year quarter. Notably, Manpower stated that its quarterly earnings were positively impacted by foreign currency fluctuations.

For 2013, adjusted earnings per share were $4.45, which surpassed the Zacks Consensus Estimate of $4.22 and increased 50.8% year over year. Including one-time items, EPS came in at $3.62, up 46.6% year over year.

Revenues & Margins

Total revenue rose 1.0% (0.7% in constant currency) year over year to $5,252.1 million, based on robust performances across all geographies. Moreover, reported revenues came ahead of the Zacks Consensus Estimate of $5,212 million.

For full-year 2013, revenues fell 2.1% (2.1% in constant currency) year over year to $20,250.5 million. However, reported revenues surpassed the Zacks Consensus Estimate of $20,210 million.

Gross profit increased 1.1% to $886.6 million, due to marginal rise in cost of services, partly offset by higher revenues. Gross margin remained almost unchanged at 16.9%.,

Manpower posted operating profit of $167.0 million, up 59.1% from the prior-year period. Excluding restructuring charges, operating profit came in at $194 million that increased 46% year over year, while operating margin expanded 120 basis points to 3.7%.

Selling and administrative expenses fell 6.8% (6.8% on constant currency) to $719.6 million.

Operating Groups

By geographic segments, revenues from the United States were flat year over year at $750.6 million. The segment's adjusted operating profit increased 26.8% to $27.5 million from the prior-year quarter.

In Other Americas , revenues decreased 4.5% (up 2.5% in constant currency) to $387.1 million, while the segment's operating profit decreased 13.8% (down 8.8% in constant currency) to $11.9 million.

In France , revenues rose 6.4% year over year (up 1.4% in constant currency) to $1,398.4 million, while the segment's operating profit increased 95.5% (up 86.4% in constant currency) to $69.9 million.  

In Italy , revenues increased 4.9% year over year (flat in constant currency) to $281.6 million. The segment's operating profit rose 88.3% (up 79.3% in constant currency) to $16.7 million.

In Other Southern Europe , revenues increased 23.9% (up 17.3% in constant currency) to $240.2 million from the year-ago quarter. The operating profit came in at $4.4 million, up substantially from $1.4 million in the year-ago quarter.

In Northern Europe , revenues rose 2.3% (up 0.8% in constant currency) to $1,521.6 million while operating profit increased 33.2% (up 32.0% in constant currency) to $45.6 million, both on a year-over-year basis.

In APME (Asia Pacific Middle East) , revenues came in at $590.5 million, down 15.4% (down 4.9% in constant currency) year over year. The segment's operating profit came in at $16.6 million, down 42.1% (down 34.6% in constant currency) from the prior-year quarter.

Revenues from Right Management decreased 3.3% (down 2.3% in constant currency) year over year to $82.1 million. The company posted operating income of $6.5 million, down 20.7% (down 20.5% in constant currency) from the year-ago quarter.

Other Financial Details

Manpower ended the quarter with cash and cash equivalents of $737.6 million, total debt of $517.9 million, which reflected a debt-to-capitalization ratio of 15.1%, and shareholders' equity of $2,914.2 million. It also has a $600 million revolving credit facility agreement.

Moreover, Manpower incurred a capital expenditure of $44.7 million during the year ended Dec 31, 2013.

Guidance

Manpower now expects first-quarter 2014 earnings per share in the range of 62-70 cents. The Zacks Consensus Estimate for first-quarter 2014 stands at 70 cents. Management anticipates first-quarter total revenue to range from flat to 2% growth. Gross margin is expected to be in the range of 16.4%-16.6%. Further, operating profit margin is anticipated to be 2.1% to 2.3%. Tax rate is expected to be around 44%.

With a well-established network in about 79 countries, Manpower currently provides services to about 400,000 clients. We believe that the company's brand value, broad range of services and a strong global footprint provide it a competitive edge over peers like Robert Half International Inc. ( RHI ), TrueBlue, Inc. ( TBI ) and Korn/Ferry International ( KFY ).

Currently, Manpower carries a Zacks Rank #3 (Hold).



KORN/FERRY INTL (KFY): Free Stock Analysis Report

MANPOWER INC WI (MAN): Free Stock Analysis Report

ROBT HALF INTL (RHI): Free Stock Analysis Report

TRUEBLUE INC (TBI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: EPS , KFY , MAN , RHI , TBI

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