Leading staffing firm
Robert Half International Inc.
) reported fourth quarter 2012 earnings of 42 cents, beating the
prior-year quarter earnings of 30 cents per share by 40%. The
results were toward the higher end of management's expectation of
38 cents to 43 cents. Earnings per share also beat the Zacks
Consensus Estimate by a penny. Earnings growth was driven by
solid top line and operating income growth.
The company's earnings have now grown more than 20% year over
year for 11 straight quarters driven by growing demand for
skilled workforce and consulting services.
We believe that the demand for the company's services, in
particular its staffing services, is highly dependent on the
state of the economy and the staffing needs of the company's
clients. A gradual improvement in economic conditions and in job
markets in the U.S. has led to a rise in the demand for the
company's specialized staffing and consulting services.
Quarter in Detail
During the quarter, Robert Half's total revenue increased 6.2%
to $1.03 billion compared with $973.5 million in the year-ago
period on the back of continued demand for skilled professionals
on an interim and full-time basis, particularly in U.S. staffing
operations. Revenues were within the company's guidance range of
$1.01 to $1.06 billion and in line with the Zacks Consensus
Currency exchange rates had an unfavorable impact on the
quarter and reduced fourth quarter revenues by 0.3% year over
year. However, currencies favorably impacted staffing revenues on
a sequential basis.
Gross profit was $416.4 million in the reported quarter, up
7.5% year over year. Gross margin expanded 50 basis points to
40.3% in the fourth quarter as against 39.8% in the prior-year
quarter. Operating income increased 35.0% to $97.2 million in the
quarter. Operating margin increased 200 basis points to 9.4% in
the fourth quarter of 2012 on the back of higher gross margins,
lower operating expenses and solid Protiviti results.
All the six segments of the company reported positive revenue
growth in the fourth quarter of 2012. Revenue at Accountemps
increased 4.2%. Revenue surged 6.4%, both at Office Team and at
Robert Half Technology. Revenue at Robert Half Management
Resources shot up 8.0% and at Robert Half Finance and Accounting
it went up 7.5%. Revenue at Protiviti division jumped 9.7% from
the prior-year quarter.
Robert Half's full year 2012 earnings increased 44.2% to $1.50
per share. However, the results were behind the Zacks Consensus
Estimate of $1.55 per share. During the year, Robert Half's total
revenue was in line with the Zacks Consensus Estimate but
increased 8.7% to $4.1 billion driven by continued demand for
skilled professionals over the year.
Robert Half had cash and cash equivalents of $287.6 million at
the end of fourth quarter versus $289.4 million at the end of the
third quarter. Capital expenditure was $14.0 million in the
quarter as against $11.6 million at the end of the third
Robert Half paid its stockholders a cash dividend of 15 cents
per share in the quarter. The company also repurchased 1.2
million shares for a total of $34 million during the quarter.
There are approximately 11.4 million shares remaining under the
board approved stock repurchase plan.
Robert Half carries a Zacks Rank #3 (Hold). Stocks that are
performing well and worth considering in the business services
Korn Ferry International (
Manpower, Inc. (
Assignment Inc. (
. While Korn Ferry carries a Zacks Rank #1 (Strong Buy), both
Manpower and Assignment hold a Zacks Rank #2 (Buy).
ON ASSIGNMENT (ASGN): Free Stock Analysis
KORN/FERRY INTL (KFY): Free Stock Analysis
MANPOWER INC WI (MAN): Free Stock Analysis
ROBT HALF INTL (RHI): Free Stock Analysis
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