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ManpowerGroup (MAN) Q4 Earnings Beat, Misses on Sales

ManpowerGroup Inc. 's MAN fourth-quarter 2015 earnings of $1.66 per share jumped 12.9% year over year, cruising way ahead of the Zacks Consensus Estimate of $1.51. The bottom line, which has been delivering a better-than-expected performance for nearly four years now, was favorably impacted by lower-than-anticipated tax rate in the reported quarter.

ManpowerGroup Inc. (MAN) Street Actual & Estimate EPS - Last 5 Quarters | FindTheCompany

However, quarterly earnings were hurt by foreign currency headwinds that alone reduced earnings by 16 cents. On a currency-neutral basis, the bottom line surged 23.8% year over year.

Also, bearing the brunt of forex headwinds, revenues declined 3.3% year over year to $4,953.9 million and fell short of the Zacks Consensus Estimate of $5,020 million. On a constant currency basis, revenues advanced 7%.

Gross profit decreased 2% (up 7.8% in constant currency) to $851.1 million, while gross margin expanded 20 basis points (bps) to 17.2%. While permanent recruitment growth contributed to gross margin expansion, overall staffing margin remained flat year over year. Operating profit of $181.1 million declined 6.3% (up 4.7% in constant currency) from the year-ago quarter.

Operating Groups

By geographic segments, revenues from the United States fell 5.2% year over year to $748.5 million. Also, the segment's operating profit dropped 3.0% from the prior-year figure to $39.2 million.

In Other Americas , revenues edged up 2.3% (up 23.5% in constant currency) to $391.8 million, while operating profit rose 10% (up 31.2% in constant currency) to $16.5 million.

In France , revenues fell 7.3% year over year (up 5.7% in constant currency) to $1,175.4 million, while operating profit decreased 2.2% (up 11.3% in constant currency) to $66.7 million.

In Italy , revenues grew 5.5% year over year (up 20.3% in constant currency) to $312.3 million. The segment's operating profit rose 5.7% (up 20.7% in constant currency) to $19.6 million.

In Other Southern Europe , revenues grew 3.8% (up 14.8% in constant currency) to $255.5 million. Operating profit soared 20.6% (up 33.1% in constant currency) to $6.8 million.

In Northern Europe , revenues fell 5.4% (up 5.6% in constant currency) to $1,421.0 million, while operating profit plunged 25.7% (down 18.1% in constant currency) to $40.1 million, both on a year-over-year basis.

In APME (Asia Pacific Middle East), revenues came in at $579.2 million, up 2.2% (up 11.9% in constant currency) year over year. The segment's operating profit was $18.1 million, down 14.3% (down 8.9% in constant currency) year over year.

Also, revenues from Right Management inched up 1.0% (up 7.8% in constant currency) year over year to $70.2 million. The company posted operating income of $10.3 million, up a significant 64.1% (up 76.3% in constant currency) from the year-ago period.

Other Financial Details

ManpowerGroup ended the quarter with cash and cash equivalents of 730.5 million, long-term debt of $810.9 million, and shareholders' equity of $2,692.5 million.

The company generated cash worth $511.5 million from operating activities, while it incurred capital expenditure of $52.3 million during 2015. Consequently, free cash flow for the year amounted to approximately $459 million.

Also, during the fourth quarter, the company repurchased 657,000 shares for about $57 million, taking the total buybacks for the year to $580 million. As of the year end, the company had 5.3 million shares remaining under its 6 million buyback authorization made in Oct 2015.

Guidance

Management remains impressed with its overall fourth-quarter performance and the strategic progress made by the company in 2015. Despite volatile macroeconomic conditions, the company remains optimistic about its future performance, as it is focused on working toward enhancing this progress.

Revenues for the first quarter of 2016 are expected to grow in a range of 5%-7%, on a constant currency basis. Foreign currency is expected to adversely affect revenue growth by 4%, including which, revenues are estimated to increase in a band of 1%-3%.

Including a negative impact of 4 cents from foreign exchange, ManpowerGroup expects first-quarter 2016 earnings per share in the range of 87-95 cents. The Zacks Consensus Estimate for the first quarter stands at 94 cents.

Revenue growth in the Americas, Northern Europe and Asia Pacific Middle East is expected to be the same as that recorded in fourth-quarter 2015, while that in Southern Europe is envisioned to be somewhat lower than the improvement in the reported quarter.

Zacks Rank

ManpowerGroup currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Cross Country Healthcare, Inc. CCRN , Insperity, Inc. NSP , each with a Zacks Rank #1 (Strong Buy) and Korn/Ferry International KFY , with a Zacks Rank #2 (Buy).

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MANPOWER INC WI (MAN): 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 Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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