Monster Worldwide Inc.
) reported earnings of 8 cents per share in the first quarter of
2013, ahead of the Zacks Consensus Estimate by a penny. However,
earnings per share ("EPS") declined 20.0% from the year-ago
quarter, primarily due to lower revenues and operating margin
Revenues declined 9.3% year over year to $211.9 million in the
first quarter. This was well short of the Zacks Consensus
Estimate of $216.0 million. Results were impacted by
year-over-year declines in revenues at Monster Careers (down 9.7%
year over year) and Internet Advertising & Fees (down 5.4%
year over year).
Moreover, Monster witnessed year-over-year revenue declines
across all of its geographies. Revenues from North America and
Asia-Pacific were down 3% and 10% from the year-ago quarter,
respectively. Revenues from European operations were also down
20% year over year.
Monster reported non-GAAP operating income of $15.4 million,
which was down 22% from the year-ago quarter. Operating margins
declined 110 basis points to 7.3%, primarily due to a 110 basis
point increase in operating expenses, as a percentage of
However, operating expenses declined 8.2% from the year-ago
quarter to $196.6 million. The year-over-year decline in salaries
& related (down 13% year over year) and office & general
expenses (5% year over year) led to the decrease in operating
Non-GAAP net income decreased 24.4% from the year-ago quarter
to $8.7 million.
Monster ended the quarter with cash and cash equivalents of
$130.9 million versus $148.2 million at the end of the previous
quarter. Monster used $8.6 million cash for operating
Corporate Restructuring Initiative
Monster reported a pre-tax restructuring charge of $13 million
in continuing operations and $6 million in loss from discontinued
operations during the first quarter. These were related to
Monster's corporate restructuring initiative.
Due to the uncertain macroeconomic environment and the
restructuring actions undertaken by the company, Monster did not
provide any guidance for bookings and revenues. Nevertheless, the
company provided earnings guidance in the range of 6 cents to 10
cents per share for the second quarter of 2013. The Zacks
Consensus Estimate for the second quarter is pegged at 8 cents
Monster's results continued to be affected by reluctant
recruiters due to the sluggish macroeconomic environment. Monster
continues to face significant competition from social and
professional networking websites such as
) as well as from traditional advertising companies such as
). Increasing competition is expected to hurt profitability going
forward. However, the corporate restructuring initiative is
expected to boost margins going forward.
Currently, Monster has a Zacks Rank #4 (Sell).
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