Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=227367
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ManpowerGroup

Source: ManpowerGroup Inc.

ManpowerGroup's fourth-quarter earnings surged on hike in  European labor demand and a successful cost-cutting strategy


ManpowerGroup’s 4th-quarter earnings nearly doubled

by Rose Zhou
Jan 30, 2014


ManpowerGroup Inc. reported Thursday its fourth quarter earnings nearly doubled. The world’s third-largest temporary-staffing company attributes its improvement to an increase in demand for labor in Europe and aggressive cost-cutting.

In the quarter ended Dec. 31, Milwaukee-based ManpowerGroup earned $101.2 million, or $1.25 per diluted share, up 90 percent from $53.5 million, or $0.68 per diluted share, in the year-ago period. The quarterly and annual earnings are roughly in line with the Wall Street’s consensus estimate of $1.26 per share, and $4.22 as compiled by Zacks Investment Research Inc.

The company reported a $26.5 million restructuring charge related to simplification and cost controls in its fourth-quarter operational performance.

Revenues in fourth quarter rose 1 percent to $5.3 billion from $5.2 billion the previous year.

“While we are gaining increased confidence we remain guarded on revenue growth in the first quarter,” Jeff Joerres, chairman and CEO of ManpowerGroup, said in a press release.

William Blair & Co analyst Timothy McHugh said management is taking a fairly cautious approach because the first quarter is the seasonally weakest quarter for the company historically.

“We note that the company has beaten estimates every quarter since 2009, with particularly strong performance in the last year,” said McHugh in a research note.

McHugh attributed much of ManpowerGroup’s improved profitability to legislatively mandated changes to the French payroll tax credit in 2013. Two-thirds of the company’s revenue is generated in Europe.

McHugh pointed out that the management’s aggressive effort to cut down nearly $200 million in ManpowerGroup’s selling general and administrative expenses is starting to shine through after two years.

ManpowerGroup earned $288 million, or $3.62 per diluted share in the year ended Dec. 31, a 45.8 percent increase from $197.6 million, or $2.47 per share in the prior year.

ManpowerGroup shares closed at $78, down $1.36 from Wednesday's close of $79.36.