) posted better-than-expected second-quarter 2014 results. Earnings
per share came in at $1.35 cents, which handily beat the Zacks
Consensus Estimate of $1.32 and increased 28.6% from $1.05
delivered in the prior year quarter.
Manpower Inc - Earnings Surprise |
Consistent strong performances across most of the major regions,
along with effective cost management were the primary growth
drivers. Favorable currency fluctuations also contributed to
However, sluggishness in the overall sector and a slowly
recovering French economy had investors' worried, which was
reflected in a 3.2% decline in Manpower's stock price
Revenues & Margins
Total revenue rose 5.6% (up 3.7% in constant currency) year over
year to $5,321.7 million, based on robust regional performances
partly run down by weaker-than-expected performance in France.
Moreover, reported revenues came ahead of the Zacks Consensus
Estimate of $5,319.0 million.
Gross profit increased 7.3% (up 5.6% in constant currency) to
$897.3 million due to higher revenues, partly offset by a rise in
cost of services. Gross margin expanded nearly 30 basis points
(bps) to 16.9%.
ManpowerGroup posted operating profit of $187.4 million, up
46.3% (up 43.2% in constant currency) from the prior-year
Selling and administrative expenses were up 0.2% (down 1.2% on
constant currency) to $709.9 million.
By geographic segments, revenues from the United States grew
3.7% year over year to $775.9 million. The segment's operating
profit decreased 2.9% to $29.7 million from the prior-year
In Other Americas, revenues decreased 3.1% (but grew 7.7% in
constant currency) to $375.2 million while the segment's operating
profit rose 18.3% (up 29.2% in constant currency) to $14.0
In France, revenues rose 6.9% year over year (up 1.9% in
constant currency) to $1,412.1 million while the segment's
operating profit increased 75.9% (up 67.9% in constant currency) to
In Italy, revenues increased 12.8% year over year (up 7.5% in
constant currency) to $313.9 million. The segment's operating
profit rose 24.9% (up 19.1% in constant currency) to $18.3
In Other Southern Europe, revenues increased 19.7% (up 14.9% in
constant currency) to $243.0 million from the year-ago quarter. The
segment's operating profit rose substantially to $5.7 million from
$1.2 million reported in the year-ago quarter.
In Northern Europe, revenues rose 9.2% (up 4.6% in constant
currency) to $1,527.8 million while operating profit increased
39.3% (up 34.4% in constant currency) to $46.2 million, both on a
In APME (Asia Pacific Middle East), revenues came in at $594.0
million, down 4.7% (down 1.8% in constant currency) year over year.
The segment's operating profit came in at $21.0 million, up 2.9%
(up 5.9% in constant currency) from the prior-year quarter.
Revenues from Right Management decreased 1.4% (down 2.7% in
constant currency) year over year to $79.8 million. The company
posted operating income of $12.7 million, up 72.3% (up 72.4% in
constant currency) from the year-ago quarter.
Other Financial Details
ManpowerGroup, which competes with
), ended the quarter with cash and cash equivalents of $638.5
million, total debt of $529.0 million, which reflected a
debt-to-capitalization ratio of 15.0% and shareholders' equity of
Moreover, ManpowerGroup incurred a capital expenditure of $21
million during the first half of the year while generated negative
free cash flow came of $37 million. For the first half, Manpower
bought $17 million worth of shares and paid $39 million as
ManpowerGroup now expects third-quarter 2014 earnings per share
in the range of $1.46 to $1.54. The Zacks Consensus Estimate for
third-quarter 2014 stands at $1.49.
Moreover, for the third quarter, Manpower expects revenues to be
up 5%-7% (up 4%-6% in constant currency). Gross margin is expected
to be weaker than the second quarter on account of seasonal
Operating margin is expected to be up 50 bps and in the range of
Currently, Manpower carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the same sector include
CTPartners Executive Search Inc.
AMN Healthcare Services Inc.
). While CTPartners sports a Zacks Rank #1 (Strong Buy), AMN
Healthcare Services has a Zacks Rank #2 (Buy).
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