Robert Half International Inc.’s stock rallied Friday after fourth-quarter profit beat expectations, but the staffing-services company provided a mixed outlook for the current quarter as revenue from candidate placement in permanent and temporary jobs has dropped off in recent weeks.
Chief Executive Keith Waddell said late Thursday that global labor markets remained tight and demand for workers remained high despite an uncertain economic outlook. But he said that, while the company’s clients continue to hire, they are doing so at “an even more measured pace.”
That has weighed on near-term revenue, as it has had the effect of “lengthening” the sales cycle.
Chief Financial Officer Michael Buckley told analysts on a post-earnings conference call that fourth-quarter revenue for its contract talent solutions business, which helps provide businesses with temporary staffing as needed, fell 1% from the same period a year ago, but results worsened late in the quarter as December revenue was down 6%.
Revenue from permanent placement, or for assisting employers in filling full-time jobs, was up 2% for the quarter, but it was down 1% in December.
The declines have steepened at the start 2023, with revenue from contract talent solutions falling 7% over the first two weeks of January, with permanent-placement revenue sinking 23% over the first three weeks of the month.
With the recent trends in mind, Buckley said first-quarter revenue is expected to be $1.69 billion to $1.77 billion, which would be down from $1.82 billion a year ago, but in line with a FactSet consensus as of the end of December of $1.7 billion.
However, first-quarter guidance for earnings per share of $1.10 to $1.20, down from $1.52 last year, was below the FactSet consensus as of Dec. 30 of $1.22.
CEO Waddell said on the call that the overall first-quarter guidance was “the most conservative we’ve been in quite some time,” according to a FactSet transcript.
The weakness Robert Half is seeing seems to contrast with government data, as first-time claims for unemployment benefits fell in the week ended Jan. 21 to the lowest level seen since April, while December employment data had the unemployment rate falling back to the lowest level since 1969.
And despite the company’s mixed outlook, shares of the Chicago-based Robert Half
RHI,
+5.43%
jumped 5.4% to $85.20 on Friday, the highest closing price since June 6.
The company late Thursday reported fourth-quarter net income that fell to $147.7 million, or $1.37 a share, from $167.9 million, or $1.51 a share, but that beat the average analyst EPS estimate of $1.36. Overall revenue slipped 2.4% to $1.73 billion, just shy of the FactSet consensus of $1.74 billion.
BofA Securities analyst Heather Balsky reiterated an underperform rating on the company, saying the labor market is easing as fears of a recession start coming to a head.
Robert Half is already seeing demand for permanent staffing deteriorate, sales cycles lengthen, and its billing- and wage-rate growth soften as its small to midsized customer reacts to “a likely tough 2023 economy,” Balsky wrote in a note to clients. “[First-quarter] guidance is disappointing and trends for the first three weeks of [January] are off to a rough start.”
The stock has rallied 9.6% over the past three months but has tumbled 22.8% over the past 12 months. In comparison, the S&P 500 index
SPX,
+0.25%
has gained 4.3% over the past three months and has lost 8.2% in the past year.
Demand for jobs drops off in January, headhunter Robert Half says
Robert Half International Inc.’s stock rallied Friday after fourth-quarter profit beat expectations, but the staffing-services company provided a mixed outlook for the current quarter as revenue from candidate placement in permanent and temporary jobs has dropped off in recent weeks.
Chief Executive Keith Waddell said late Thursday that global labor markets remained tight and demand for workers remained high despite an uncertain economic outlook. But he said that, while the company’s clients continue to hire, they are doing so at “an even more measured pace.”
That has weighed on near-term revenue, as it has had the effect of “lengthening” the sales cycle.
Chief Financial Officer Michael Buckley told analysts on a post-earnings conference call that fourth-quarter revenue for its contract talent solutions business, which helps provide businesses with temporary staffing as needed, fell 1% from the same period a year ago, but results worsened late in the quarter as December revenue was down 6%.
Revenue from permanent placement, or for assisting employers in filling full-time jobs, was up 2% for the quarter, but it was down 1% in December.
The declines have steepened at the start 2023, with revenue from contract talent solutions falling 7% over the first two weeks of January, with permanent-placement revenue sinking 23% over the first three weeks of the month.
With the recent trends in mind, Buckley said first-quarter revenue is expected to be $1.69 billion to $1.77 billion, which would be down from $1.82 billion a year ago, but in line with a FactSet consensus as of the end of December of $1.7 billion.
However, first-quarter guidance for earnings per share of $1.10 to $1.20, down from $1.52 last year, was below the FactSet consensus as of Dec. 30 of $1.22.
CEO Waddell said on the call that the overall first-quarter guidance was “the most conservative we’ve been in quite some time,” according to a FactSet transcript.
The weakness Robert Half is seeing seems to contrast with government data, as first-time claims for unemployment benefits fell in the week ended Jan. 21 to the lowest level seen since April, while December employment data had the unemployment rate falling back to the lowest level since 1969.
And despite the company’s mixed outlook, shares of the Chicago-based Robert Half
+5.43%
RHI,
jumped 5.4% to $85.20 on Friday, the highest closing price since June 6.
The company late Thursday reported fourth-quarter net income that fell to $147.7 million, or $1.37 a share, from $167.9 million, or $1.51 a share, but that beat the average analyst EPS estimate of $1.36. Overall revenue slipped 2.4% to $1.73 billion, just shy of the FactSet consensus of $1.74 billion.
BofA Securities analyst Heather Balsky reiterated an underperform rating on the company, saying the labor market is easing as fears of a recession start coming to a head.
Robert Half is already seeing demand for permanent staffing deteriorate, sales cycles lengthen, and its billing- and wage-rate growth soften as its small to midsized customer reacts to “a likely tough 2023 economy,” Balsky wrote in a note to clients. “[First-quarter] guidance is disappointing and trends for the first three weeks of [January] are off to a rough start.”
The stock has rallied 9.6% over the past three months but has tumbled 22.8% over the past 12 months. In comparison, the S&P 500 index
+0.25%
SPX,
has gained 4.3% over the past three months and has lost 8.2% in the past year.
Source: https://www.marketwatch.com/story/robert-half-sees-permanent-and-temp-job-placement-revenue-drop-off-in-january-11674846063?siteid=yhoof2&yptr=yahoo