Robert Half (RHI) Q3 Earnings Meet Estimates, Revenues Beat

Robert Half International Inc.’s RHI third-quarter 2019 earnings came in line with the Zacks Consensus Estimate while revenues beat the same.

Quarterly earnings of $1.01 per share were up 6.3% year over year. The reported figure met the midpoint of the company’s guided range of 98 cents to $1.04.

Revenues of $1.55 billion beat the consensus mark by 0.3% and increased 5.9% year over year on a reported basis and 5.4% on an adjusted basis. Revenues were within the company’s guided range of $1.525-$1.590 billion.

Robert Half witnessed solid revenue growth in its U.S. staffing and Protiviti operations in the quarter.

Shares of Robert Half declined 4.5% over the past year compared with  3.2% decline of the industry it belongs to.

Let’s delve deeper into the numbers.

Segmental Performance

Global Staffing revenues of $1.25 billion increased 3.3% year over year on a reported basis and 3.4% on an adjusted basis. U.S. staffing revenues of $973 million increased 5.8% on a reported basis and 4.5% on an adjusted basis. Non-U.S. staffing revenues declined 4.6% on a reported basis and 0.3% on an adjusted basis to $280 million.

Currency movements had an unfavorable impact of 0.9% on staffing revenues.

The quarter had 64.1 billing days compared with 63.3 days in the year-ago quarter. At present, Robert Half operates 325 staffing locations worldwide, with 86 locations situated in 17 countries outside the United States.

Protiviti: Protiviti revenues were $299 million, which increased 18.3% year over year on a reported basis and 14.6% on an adjusted basis, with strength across the U.S. and non-U.S. regions. Protiviti revenues from the United States grew 17.5% on a reported basis and 16.2% on an adjusted basis. The same from international regions rose 21.2% on a reported basis and 9.3% on an adjusted basis.

Currency movement lowered revenue growth by 0.8% on a year-over-year basis. Currently, Protiviti, along with its independently-owned Member Firms, has a network of 86 locations in 27 countries.

Robert Half International Inc. Revenue (TTM)

Robert Half International Inc. Revenue (TTM)

Robert Half International Inc. revenue-ttm | Robert Half International Inc. Quote

Operating Results

Gross profit in third-quarter 2019 was $646.4 million, up 5.9% year over year. Gross margin of 41.6% was flat year over year.

Operating income was $163.8 million, up 7.8% year over year. Operating margin rose to 10.5% from 10.3% in the year-ago quarter.

Selling, general and administrative expenses increased 5.3% year over year to $483.5 million.

Balance Sheet

Robert Half ended the quarter with cash and cash equivalents of $312.7 million compared with $269.4 million at the end of the previous quarter. Cash flow from operations was $191 million and capital expenditures were $17 million in the quarter.

In the quarter, Robert Half bought back around 1.5 million shares for $80 million. The company has 3.4 million shares available for repurchase under its existing repurchase plan as approved by the board of directors. It paid out $36 million in dividends.

Fourth-Quarter 2019 Guidance

Earnings are anticipated between 94 cents and $1 per share, lower than the current Zacks Consensus Estimate of $1.02. Revenues are expected between $1.5 billion and $1.565. billion, the midpoint of which is lower than the current Zacks Consensus Estimate of $1.55 billion.

The midpoints of these projections indicate year-over-year revenue decline of 1% and EPS decline of 4%.

Zacks Rank & Stocks to Consider

Robert Half currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Business Services sector are CoreLogic CLGX, S&P Global SPGI and Paychex PAYX. While CoreLogic sports a Zacks Rank #1 (Strong Buy), S&P Global and Paychex carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings (three to five years) growth rate for CoreLogic, S&P Global and Paychex is estimated at 11%, 10% and 7%, respectively.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
S&P Global Inc. (SPGI): Free Stock Analysis Report
CoreLogic, Inc. (CLGX): Free Stock Analysis Report
Robert Half International Inc. (RHI): Free Stock Analysis Report
Paychex, Inc. (PAYX): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

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

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.