ManpowerGroup (MAN) Tops Q3 Earnings, Misses Revenues

ManpowerGroup Inc. MAN posted third-quarter 2015 earnings of $1.61 per share that remained flat compared with the year-ago quarter, but were hurt by foreign currency headwinds that alone reduced the earnings by 25 cents.

However, excluding the impact of foreign currencies fluctuation, quarterly earnings came in at $1.86 per share. Nevertheless, we observe that the company’s bottom-line handily surpassed the Zacks Consensus Estimate of $1.55.

Revenues fell 8.2% year over year to $4,972.5 million due to negative Forex impact and missed the Zacks Consensus Estimate of $5,044 million. On a constant currency basis, revenues increased 5.8%, while earrings grew 15.5%.

Moving on, gross profit decreased 5.9% (up 7% in constant currency) to $852.1 million, while gross margin came in at 17.1% as against 16.7% a year ago. Also, operating profit of $206.3 million fell 2.8% (up 12.7% in constant currency).

By geographic segments, revenues from the United States fell 3.9% year over year to $769.6 million. However, the segment’s operating profit increased 8.7% from the prior-year figure to $45.5 million supported by higher gross profit margin.

In Other Americas, revenues declined 5.6% (up 16.4% in constant currency) to $367 million, while operating profit declined 9.7% (up 10.2% in constant currency) to $13.2 million.

In France, revenues fell 14.6% year over year (up 1.9% in constant currency) to $1,242.5 million, while operating profit decreased 11% (up 6.4% in constant currency) to $74.9 million.

In Italy, revenues grew 10.3% year over year (up 31.4% in constant currency) to $324.4 million. The segment’s operating profit rose 19.1% (up 42.1% in constant currency) to $17.5 million.

In Other Southern Europe, revenues fell 0.6% (up 16% in constant currency) to $258.5 million from the year-ago quarter. Operating profit climbed 18.5% (up 38.3% in constant currency) to $7.3 million.

In Northern Europe, revenues fell 11.7% (up 3.1% in constant currency) to $1,373.4 million, while operating profit decreased 15.4% (down 3% in constant currency) to $50.3 million, both on a year-over-year basis.

In APME (Asia Pacific Middle East), revenues came in at $570.2 million, down 3.7% (up 11.9% in constant currency) year over year. The segment’s operating profit was $23.9 million, up 9.9% (increase 27% in constant currency) year over year.

Also, revenues from Right Management decreased 6.6% (up 1.3% in constant currency) year over year to $66.9 million. The company posted operating income of $10.7 million, up a significant 72% (up 75.4% in constant currency) from the year-ago period.

ManpowerGroup ended the quarter with cash and cash equivalents of 652.5 million, long-term debt of $840.8 million and shareholders’ equity of $2,685.2 million.

The company incurred capital expenditure of $33.3 million during the first nine months of 2015.

Including a negative impact of 15 cents from foreign exchange, ManpowerGroup expects fourth-quarter 2015 earnings per share in the range of $1.47 to $1.55. The Zacks Consensus Estimate for stands at $1.52.

Revenues are expected to fall 1% to 3%, reflecting a negative impact of about 13% from currency fluctuations.

On a constant currency basis, revenues are expected to grow in the range of 6% to 8%. Revenues in the Americas are expected to grow in the 3% to 5% range. In Northern Europe, revenue growth is expected to be 5% to 7%, while that in Southern Europe will be in the range of 8% to 10%. Revenues in Asia Pacific Middle East are expected within 11% to 13%. The company expects revenues from Right Management to grow in the range of flat to 2%.

ManpowerGroup which competes with the likes of Korn/Ferry International KFY, Kforce Inc. KFRC and Resources Connection Inc. RECN sports a Zacks Rank #1 (Strong Buy).

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