Leading staffing firm
Robert Half International Inc.
) reported second-quarter 2014 earnings of 55 cents per share,
ahead of the prior-year quarter adjusted earnings of 46 cents by
19.6%. Earnings also beat the Zacks Consensus Estimate by 5.8%.
Robert Half witnessed strong year-over-year earnings growth
driven by solid demand for services provided by skilled
professionals as well as growing labor market in the U.S. The
company's international operations also improved, particularly
driven by permanent placement services. In fact, the company's
earnings have now grown in double digits for 17 consecutive
quarters on a year-over-year basis, driven by growing demand for
skilled workforce and consulting services.
Robert Half International Inc - Earnings
Surprise | FindTheBest
Robert Half's total revenue was in line with the Zacks Consensus
Estimate and grew 9.6% year over year to $1.16 billion in the
second quarter, driven by solid performance in the company's
permanent placement and technology staffing divisions. Protiviti
operations also delivered strong revenues in the quarter.
Total gross profit was $478.4 million in the reported quarter,
up 10.7% year over year. Gross margin expanded 50 basis points
(bps) to 41.1% in the second quarter driven by higher sales.
Total operating income increased 22.7% to $123.6 million in the
quarter. Operating margin increased 110 bps to 10.6% in the quarter
on the back of higher gross margins and solid Protiviti
Based on the nature of services, the company has three
reportable operating segments namely, Temporary and Consultant
Staffing; Permanent Placement Staffing and Risk Consulting and
Internal Audit Services. Revenues from Temporary and Consultant
Staffing and Permanent Placement Staffing come under the global
staffing division, while the Risk Consulting and Internal Audit
Services are provided under the Protiviti division.
Global Staffing Division:
Global Staffing revenues increased 8.7% in the quarter, driven by
8.2% growth in the Temporary and Consultant Staffing division and
13.8% growth in Permanent Placement Staffing. However currency had
a negative impact of 0.4% during the quarter. Global Staffing
revenues, on a constant currency basis, increased 8.9% year over
year, driven by 10.3% growth in the U.S. and a 4.4% improvement in
international staffing revenues in the quarter.
Overall staffing gross margin expanded 70 bps to 43.0%, led by
solid margin of 36.5% in the Temporary and Consultant Staffing
operations and 100.0% margin in Permanent Placement operations.
Operating margin of the staffing division was 20% , led by 9.7%
margin in Temporary and Consultant Staffing operations and strong
margin of 21.8% in Permanent Placement operations.
Global revenues for Protiviti improved 14.4% year over year in the
second quarter, driven by 18.4% growth in U.S. revenues. However,
international revenues declined 0.2%.
Gross margin was 28.4% of Protiviti revenues, down 20 bps from
the year-ago quarter due to higher cost of services.
Operating margin was 8.2% of Protiviti revenues, up 150 bps from
the year-ago quarter due to higher sales and gross margins in
Robert Half had cash and cash equivalents of $307.8 million at
the end of the second quarter versus $267.7 million at the end of
the first quarter. Capital expenditure was $10.6 million in the
second quarter as against $12.41 million in the first quarter.
The company issued earnings and sales guidance for the third
quarter of 2014. Robert Half expects revenues in the range of
$1.17-$1.22 billion in the third quarter, up from $1.07 billion in
the year-ago quarter. The company expects earnings in the range of
55-60 cents per share, up from 48 cents earned in the prior-year
Robert Half carries a Zacks Rank #4 (Sell). Better-ranked stocks
worth considering in the business services sector include
CTPartners Executive Search Inc.
. While Manpower sports a Zacks Rank #1 (Strong Buy), CTPartners
carries a Zacks Rank #2 (Buy). Another stock worth considering in
the consumer staples sector is
Columbia Sportswear Company
, carrying a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
MANPOWER INC WI (MAN): Free Stock Analysis
COLUMBIA SPORTS (COLM): Free Stock Analysis
ROBT HALF INTL (RHI): Free Stock Analysis
CTPARTNERS EXEC (CTP): Free Stock Analysis
To read this article on Zacks.com click here.