Manpower Inc.’s (MAN) comprehensive range of services makes it a truly global staffing firm. The company provides services for the entire employment and business cycle including permanent, temporary and contract recruitment, employee assessment and selection, training, outplacement, outsourcing and consulting.
The company’s brand value and strong global network provide a competitive advantage and reinforces its dominant position in the market. Manpower leverages a strong network of 3,950 offices in 82 countries and serves approximately 400,000 clients.
Growth prospects in under-penetrated staffing markets are a significant driver for Manpower. The company indicated that Germany, Sweden, U.K., Canada, Mexico, France and Italy all witnessed robust revenue growth during second quarter 2010. Despite the recent economic downturn, the company’s U.S. operations also registered revenue growth.
The company posted a revenue growth of 20.9% year over year in second quarter 2010. Management now expects a total revenue growth of 20% to 22% in constant currency for the third quarter.
With improvement in the economic conditions, the company’s staffing business is also stabilizing. However, Manpower’s Right Management and Jefferson Wells brands continue to struggle. Right Management witnessed a fall in demand for the counter-cyclical outplacement services, whereas Jefferson Wells that offers professional financial services continues to portray sluggish demand as companies still remain conscious of discretionary spending. Moreover, Manpower also notified that the operating environment in France remains highly competitive.
Given the pros and cons, we prefer to be Neutral at this juncture. However, Manpower’s better-than-expected second quarter 2010 results that topped the Zacks Consensus Estimate on the heels of revenue growth across all geographical regions, and the acquisition of technology staffing firm COMSYS, support the company’s Zacks #2 Rank, which translates into a short-term ‘Buy’ rating.
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