On Mar 4, 2015, we issued an updated research report on Robert Half International Inc RHI.
This global staffing firm reported better-than-expected fourth quarter and 2014 results on Jan 29 on consistently rising demand for staffing services. Earnings of 62 cents grew 26.5% from the prior year quarter, driven by top-line growth and margin expansion. In fact, the company’s earnings have now grown in double digits for 19 consecutive quarters on a year over year basis.
Revenues increased 13% year over year, driven by solid demand for services provided by skilled professionals as well as growing labor market in the U.S. Protiviti operations once again delivered strong revenues in the quarter. The company’s gross and operating margins also improved in the quarter driven by higher revenues.
Robert Half’s revenues have grown year over year for the past four years, driven primarily by broad-based and increasing demand for the company’s professional staffing services, particularly in the U.S. The company’s international operations have also been improving since the first quarter of 2014, driven by permanent placement services.
The rising staffing needs of the company’s clients and a gradual improvement in economic conditions and job markets in the U.S. led to a rise in the demand for temporary workers. In fact, more and more companies are using temporary and consulting professionals as a permanent part of their human resources mix. Also, according to the Affordable Care Act, America's temporary workforce will continue to grow, going ahead. More than half of the new job growth predicted through 2020 is expected to come from this arena.
Robert Half’s subsidiary Protiviti is also one of the key drivers of revenues and operating performance. It helps companies solve problems in finance, technology, operations, governance, risk and internal audit. The company expects Protiviti’s momentum to continue in the upcoming quarters with an improvement in the economy this year.
However, rising health care costs per the new health reform have increased the costs of the company. Also, fluctuations in currency values have an adverse impact on the profitability of the company, as Robert Half derives a considerable portion of revenues from foreign countries.
Other well-placed stocks in the staffing industry include Insperity, Inc. NSP, TrueBlue, Inc. TBI and Cross Country Healthcare, Inc. CCRN.
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