Robert Half Lags, Gives Outlook - Analyst Blog

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Robert Half International Inc. ( RHI ), a leading global staffing and risk consulting services provider, reported solid fourth quarter earnings of $42.6 million or 30 cents a share, up considerably from $24.8 million or 17 cents a share in the year-earlier quarter. Earnings per share, however, lagged the Zacks Consensus Estimate of 31 cents.

In fiscal 2011, Robert Half posted more than doubled net income of $149.9 million or $1.04 per share from the prior-year net income of $66.1 million or 44 cents per share. Earnings per share missed the Zacks Consensus Estimate of $1.05 per share.

Profits were primarily driven by continued demand for professional staffing and Protiviti. Further, Robert Half registered sequential as well as year-over-year revenue growth across all its business segments in the reported quarter.


Besides revenue, earnings also experienced robust growth owing to the strong demand of personnel in the technology and accounting sectors.

Quarter in Detail

During the quarter, Robert Half's total revenue increased 14.3% to $973.5 million compared with $851.6 million in the year-ago period. In fiscal 2011, the company generated $3.78 billion revenues, up 18.9% from $3.18 billion reported in fiscal 2010.

Robert Half noted that the volatile currency markets impacted the revenue trends during the quarter.

The overall gross profit was $387.3 million or 39.8% of the total revenue in the fourth quarter of 2011 as against $326.9 million or 38.4% of revenues in the prior-year quarter. Gross profit in the fiscal 2011 was $1.49 billion or 39.4% of revenues as compared to $1.19 billion or 37.6% of revenues in the prior-year period.

Operating income increased 67.1% to $72.2 million in the quarter from $43.2 million in the comparable quarter last year. In fiscal 2011, operating income more than doubled to $250.2 million from $115.2 million in 2010.

Segment Details

All the six segments of the company reported positive revenue growth in the fourth quarter as well as in the fiscal 2011. Revenue at Accountemps increased 14.0% to $363.8 million, while the same for Office Team surged 12.4% to $195.9 million in the quarter. Revenue at Robert Half Technology expanded to $113.0 million from $92.1 million and Robert Half Management Resources revenue shot up 13.1% to $116.6 million from $103.1 million. Robert Half Finance and Accounting and Protiviti division revenues jumped 26.1% and 5.5% to $74.8 million and $109.4 million, respectively, in the quarter.

In fiscal 2011, revenues at Accountemps increased 15.7% to $1.41 billion, while the same for Office Team surged 20.3% to $757.1 million in the quarter. Revenue at Robert Half Technology expanded to $428.5 million from $336.3 million and Robert Half Management Resources revenue shot up 18.6% to $459.6 million from $387.4 million. Robert Half Finance and Accounting and Protiviti division revenues jumped 36.6% and 9.9% to $302.2 million and $423.8 million, respectively, in the quarter.

Financial Update

Robert Half had cash and cash equivalents of $279.3 million in the year 2011. Accounts receivable were $493.3 million at the end of the year, while current liabilities amounted to $473.0 million.

In the fourth quarter, Robert Half paid its stockholders a cash dividend of 14 cents at a cost of $20 million. The company also repurchased 300,000 shares for a total of $7.5 million, out of the remaining 6.1 million shares under the board approved stock repurchase plan.

Guidance

For the first quarter of 2012, the company expects its revenue to come in the range of $960 million to $1.01 billion, while it expects its earnings to come in the range of 25 to 30 cents per share.?

Based in Menlo Park, California, Robert Half provides staffing and risk consulting services in North America, South America, Europe, Asia, and Australia. Robert Half, primarily competes with Manpower Inc. ( MAN ). It currently has a Zacks #3 Rank, which implies a short-term Hold rating on the stock. Over the long-term, we hold a Neutral rating on the stock.


 
MANPOWER INC WI ( MAN ): Free Stock Analysis Report
 
ROBT HALF INTL ( RHI ): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MAN , RHI

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