Robert Half (RHI) Q3 Earnings and Revenues Beat Estimates

Robert Half International Inc. RHI reported impressive third-quarter 2020 results, with earnings and revenues beating the Zacks Consensus Estimate.

Quarterly earnings of 67 cents per share beat the consensus mark by 11.7% but were down 33.7% year over year. Revenues of $1.19 billion surpassed the consensus mark by 2.5% but declined 23.2% year over year on a reported basis and 23.9% on an as-adjusted basis.

Notably, the company’s shares have depreciated 10.8% year to date compared with the 17.1% decline of the industry it belongs to.

Staffing Revenues Decline, Protiviti Up

Global Staffing revenues of $869 million declined 31% year over year on a reported as well as as-adjusted basis. U.S. staffing revenues of $666 million were down 32% on a reported and as-adjusted basis. Non-U.S. staffing revenues declined 28% on a reported basis and 29% on an as-adjusted basis to $203 million.

The quarter had 64.3 billing days compared with 64.1 billing days in the year-ago quarter. At present, Robert Half operates 326 staffing locations worldwide, with 88 locations situated in 17 countries outside the United States.

Protiviti revenues came in at $321 million, which increased 4% year over year on a reported basis and 6% on an as-adjusted basis. U.S. Protiviti revenues of $260 million increased 11% year over year on a reported basis and 10% on an as-adjusted basis. Non-U.S Protiviti revenues of $61 million declined 5% on a reported basis and 8% on an as-adjusted basis.

Currently, Protiviti, along with its independently owned Member Firms, has a network of 86 locations in 27 countries.

Margins Shrink

Gross profit in the quarter was $467 million, down 27% year over year. Gross margin of 38.2% shrunk 230 basis points year over year. Operating income of $77 million was down 52.8% year over year. Operating margin declined to 6.5% from the year-ago quarter’s 14.6%.

Key Balance Sheet & Cash Flow Figures

Robert Half ended the first quarter with cash and cash equivalents of $587 million compared with $502 million witnessed at the end of the previous quarter. Cash flow from operations was $139 million and capital expenditures were $7 million in the quarter. Robert Half paid out $38 million in dividends and repurchased shares worth $24 million in the reported period.

Q4 Guidance

For the fourth quarter of 2020, Robert Half expects revenues in the range of $1.155 billion to $1.255 billion, the midpoint ($1.21 billion) of which is below the Zacks Consensus Estimate of $1.22 billion.

Earnings per share are expected between 55 cents and 75 cents, the midpoint (65 cents) of which is higher than the Zacks Consensus Estimate of 64 cents.

Currently, Robert Half carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

Equifax Inc. EFX reported third-quarter 2020 adjusted earnings of $1.87 per share that beat the Zacks Consensus Estimate by 16.2% and improved 26.4% on a year-over-year basis. Revenues of $1.07 billion outpaced the consensus estimate by 5.9% and improved 22% year over year.

ManpowerGroup IncMAN reported third-quarter 2020 earnings of $1.12 per share, beating the consensus mark by 90.5% but declining more than 37.5% year over year. Revenues of $4.58 billion surpassed the consensus mark by 8.7% but declined 12.7% year over year.

IHS Markit Ltd. INFO recorded third-quarter fiscal 2020 adjusted earnings per share of 77 cents that surpassed the consensus estimate by 11.6% and increased 15% on a year-over-year basis. Total revenues came in at $1.07 billion, marginally surpassing the consensus mark but declining 4% from the year-ago quarter.

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