We reaffirm our Neutral recommendation on
Robert Half International, Inc.
) and we have faith in the company's long term fundamental
despite sluggish results in the first quarter of 2013.
Why the Reiteration?
Robert Half's earnings and revenues missed the Zacks Consensus
Estimate in the first quarter. Revenues also remained flat year
over year due to poor performance of the international segment.
We note that Robert Half has significant international presence
and more than half of its revenues come from its international
A strong dollar is negatively impacting export sales. In
addition, weak staffing demand outside the U.S., especially in
Europe, due to an uncertain economic condition resulted in lower
revenues in the quarter. On a constant currency basis, revenues
increased 4% year over year.
Further, we believe that currency headwinds and a tough job
scenario, particularly in Europe, are denting the demand for
recruitment services, which keeps us on the sidelines. In
addition, cost savings and headcount reduction measures taken by
other companies adversely affect placement firms like Robert
However, we prefer to remain Neutral as Robert Half has sound
fundamentals. The company has been witnessing strong demand for
specialized staffing and consulting services, particularly in the
Further, the improving global economic condition has
heightened the demand for the company's temporary and permanent
staffing services and risk consulting and internal audit
services. Robert Half's earnings increased in the first quarter
due to the rising demand for skilled professionals in the U.S.,
particularly in permanent placement, information technology
staffing and in Protiviti operations.
Other Stock to Consider
Other stocks that are performing well and are worth
considering in the business services sector include
On Assignment Inc
AMN Healthcare Services
), all with a Zacks Rank #2 (Buy).
AMN HLTHCR SVCS (AHS): Free Stock Analysis
ON ASSIGNMENT (ASGN): Free Stock Analysis
MANPOWER INC WI (MAN): Free Stock Analysis
ROBT HALF INTL (RHI): Free Stock Analysis
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