We reaffirm our Neutral recommendation on
Robert Half International, Inc.
) following the appraisal of fourth quarter 2012 results. The
company's financial performances were a mixed bag with positive
earnings and top-line growth offset by currency translation
Why the Reiteration?
Robert Half has witnessed strong revenue growth in each of its
business segments, which drove the company's strong fourth
quarter 2012 results. Earnings of 42 cents increased 40% from the
year-earlier quarter. Earnings also beat the Zacks Consensus
Estimate of 41 cents by 2.4%. Moreover, the company's earnings
have now grown more than 20% year over year for 11 straight
Gross margin expanded 50 basis points to 40.3% in the quarter
while operating margin increased 200 basis points to 9.4% on the
back of higher gross margins, lower operating expenses and solid
results of the company's wholly-owned subsidiary, Protiviti.
Overall, we are encouraged by the company's strong demand for
specialized staffing and consulting services, particularly in the
U.S. 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
Protiviti is one of the key drivers of revenue and operating
growth and helps companies solve problems in finance, technology,
operations, governance, risk and internal audit. The strong
Protiviti performance has added to year-over-year growth rates of
U.S. staffing revenues and to global operating income in
Further, Protiviti's purchase of privately-held SusQtech Inc.
in late December helped to meet the growing demand for skilled
workforce as well as provide its key clients with software
However, currency headwinds and a tough job scenario,
particularly in Europe, resulted in soft demand for recruitment
services, which keeps us on the sidelines. The depleting margins
faced by companies have resulted in cost saving and headcount
reduction measures, which have adversely affected placement firms
like Robert Half.
Other Stock to Consider
Robert Half currently carries a Zacks Rank #2 (Buy). Stocks
that are performing well and are worth considering in the
business services sector include
AMN Healthcare Services
). While Manpower and Startek carry a Zacks Rank #1 (Strong Buy),
AMN Healthcare holds a Zacks Rank #2 (Buy).
(AHS): Get Free Report
MANPOWER INC WI (MAN): Free Stock Analysis
ROBT HALF INTL (RHI): Free Stock Analysis
(SRT): Get Free Report
To read this article on Zacks.com click here.