Robert Half International Inc. (RHI), a leading global staffing and risk consulting services provider’s second quarter 2012 earnings went up 28% to 32 cents a share from 25 cents a share reported in the year-earlier quarter. The results included 6 cents per share, related to a nonrecurring litigation settlement and the resolution of certain tax matters.
The results were driven by top-line growth and continued demand for skilled workforce and consulting services. Earnings per share, however, missed the Zacks Consensus Estimate of 35 cents.
Quarter in Detail
During the quarter, Robert Half’s total revenue increased 9.6% to $1.03 billion compared with $938.0 million in the year-ago period on the back of a 17.0% increase in demand of specialized staffing and consulting services, particularly in U.S. staffing operations. The results marginally missed the Zacks Consensus Revenue Estimate of $1.04 billion.
Gross profit was $415.3 million in the reported quarter, which climbed 11.5% year over year Gross margin expanded 70 basis points to 40.4% in the second quarter of 2012 as against 39.7% in the prior-year quarter on the back of an increase in permanent placement and conversion from temp-to-hire.
Operating income increased 17.9% to $72.0 million in the quarter from $61.1 million in the comparable quarter last year. Operating margin increased 50 basis points to 7.0% in the second quarter of 2012.
Segment Details
The company’s specialized staffing divisions include Accountemps, Robert Half Finance & Accounting and Robert Half Management Resources, all three for temporary, full-time and senior-level project professionals, respectively, in the fields of accounting and finance; OfficeTeam, for highly skilled temporary administrative support personnel; Robert Half Technology, for information technology professionals and The Protiviti, for interactive, design, marketing, advertising and public relations professionals.
All the six segments of the company reported positive revenue growth in the first quarter of 2012.
Revenue at Accountemps increased 10.3%. At Office Team it surged 7.5% and at Robert Half Technology revenue expanded by 13.8%. Revenue atRobert Half Management Resources shot up 10.9% and at Robert Half Finance and Accounting it went up by 10.5%. Revenue at Protiviti division jumped 5.1% from the prior year quarter.
Financial Update
Robert Half had cash and cash equivalents of $258.6 million at the end of second quarter of 2012 as against $244.5 million at the end of first quarter of 2012. Capital expenditure was $13.8 million at the end of the quarter, while it was $10.4 million at the end of the prior quarter.
Share Repurchase and Dividend
Robert Half paid its stockholders a cash dividend of 15 cents at a cost of $21 million. The company also repurchased 1.5 million shares for a total of $43 million during the quarter. There are approximately 3.6 million shares remaining under the board approved stock repurchase plan.
Guidance
For the second quarter of 2012, the company expects its revenue to come in the range of $1.01 billion to $1.06 billion, while it expects its earnings in the range of 36 to 41 cents per share.
Based in Menlo Park, California, Robert Half provides staffing and risk consulting services in more than 400 locations in North America, South America, Europe, Asia, and Australia. Robert Half, which primarily competes with Manpower Inc. (MAN), currently holds a Zacks #4 Rank (a short-term Sell rating).
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