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.
Despite stiff competition from Kelly Services Inc. (KELYA), Manpower benefits from growth prospects in the under-penetrated staffing markets of Italy, Germany and the Nordic region, and has significant operations in high-growth emerging markets such as India, China and Eastern Europe. Consequently, the company has strong upside potential.
Manpower recently posted third-quarter 2010 results that topped the Zacks Consensus Estimate on the heels of revenue growth across all geographical regions driven by an improvement in the temporary job market. The company indicated that the U.S., Germany and the U.K. witnessed healthy revenue growth. Despite the recent economic downturn and unemployment rate hovering around approximately 10%, the company’s U.S. operations registered revenue growth in the third quarter.
The quarterly earnings of 62 cents a share outpaced the Zacks Consensus Estimate of 47 cents and rose substantially from 23 cents earned in the prior-year quarter. Riding on the back of robust results, Manpower now expects fourth-quarter 2010 earnings in the range of 54 cents to 62 cents a share.
Given better-than-expected third-quarter 2010 results, strong staffing fundamentals buoyed by an increase in demand for temporary labor globally and improved cost structure, we maintain our ‘Outperform’ rating on Manpower. Moreover, the Zacks #1 Rank, which translates into a short-term ‘Strong Buy’ recommendation, correlates with our long-term view.
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