Monster Worldwide Inc.
) reported earnings of 2 cents per share in the fourth quarter of
2013, which missed the Zacks Consensus Estimate by a nickel.
Earnings per share declined both on a year over year basis as
well as sequentially by 59.9% and 77.8% respectively.
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Revenues declined 5.9% year over year to $198.7 million in the
fourth quarter but were ahead of the Zacks Consensus Estimate. On
a year-over-year basis, results were impacted by declines in
revenues at Monster Careers (down 6.2% year over year) and
Internet Advertising & Fees (down 2.9% year over year).
Moreover, Monster witnessed year-over-year revenue declines
across most of its geographies. Although revenues from North
America remained flat on a year-over-year basis, revenues from
Europe and Asia-Pacific were down 14.0% and 15.0% from the
year-ago quarter, respectively.
Operating expenses declined 3.7% from the year-ago quarter to
$188.7 million. While salaries & related posted an increase
(up 2.1% year over year), the other contributors toward operating
expenses decreased. Office & general expenses (down 9.1% year
over year) and marketing and promotion expenses (down 12.7% year
over year) lowered overall operating expenses.
Monster reported non-GAAP operating income of $9.9 million, which
was down 34.3% from the year-ago quarter. Operating margin
contracted 220 basis points (bps) to 5.0% from 7.2% in the
year-ago quarter, due to lower revenue base.
Non-GAAP net income from continuing operations decreased 64.8%
from the year-ago quarter to $2.3 million.
Monster had $25.0 million in cash from operating activities and
free cash flow was $17 million. Deferred revenue was $342.0
million, which grew 8.0% sequentially. During the quarter,
Monster repurchased 8.2 million shares for $46.0 million.
Monster expects first quarter earnings to range from 6 cents to
10 cents per share, while the Zacks Consensus Estimate is pegged
at 7 cents per share, which is lower than the mid-point of the
Monster's results continued to be affected by reluctant
recruiters amid a sluggish macroeconomic environment. Moreover,
its India business continues to be challenged by a tough economic
environment. The company continues to face significant
competition from professional and social networking websites such
) as well as from traditional advertising companies such as
We believe that management guidance is positive due to improving
business condition in North America and Europe. The company's
corporate restructuring initiative is expected to boost margins,
Moreover, the partnership with H&Q is believed to aid the
company in extending its footprint in South Korea. Additionally,
Monster's core business is showing signs of improvement and
exhibiting robust potential for cash flow generation.
Currently, Monster has a Zacks Rank #2 (Buy).