Robert Half International Inc. (RHI), a leading global staffing and risk consulting services provider, has reported solid second quarter earnings of $36.4 million or 25 cents a share, which tripled from $12.2 million or 8 cents a share in the year-earlier quarter. Earnings per share also exceeded the Zacks Consensus Estimate of 22 cents.
Profits were primarily driven by continued demand for professional staffing and consulting services. Further, each of the business segments of Robert Half reported both sequential and year-over-year revenue growths in the second quarter.
Quarter in Detail
During the quarter, Robert Half’s total revenue advanced 22% to $938 million compared with $769 million in the year-ago period.
Robert Half’s overall gross profit was $372.3 million or 40% of total revenues in the second quarter of 2011 as against the gross profit of $289.9 million or 38% of revenues in the prior-year quarter.
The year-over-year improvements are due to the combination of higher pay bill spreads and higher conversion revenues, which were partially offset by higher state unemployment taxes. In addition, workers compensation actuarial reviews resulted in credits of $1.3 million in the second quarter of 2011.
Operating income jumped almost three times to $61.1 million in the quarter from $22.3 million in the second quarter of 2010.
Segment Details
All the six segments reported positive revenue growth. Revenue at Accountemps increased 17% to $345.3 million, while that in Office Team surged 25% to $188.7 million. Revenue at Robert Half Technology expanded 28% to $105.1 million and Robert Half Management Resources grew 22% to $113.3 million. Robert Half Finance and Accounting and Protiviti division revenues grew 44% and 12.6% to $80.7 million and $104.9 million in the quarter, respectively.
Financial Update
Robert Half had cash and cash equivalents of $261.1 million in the second quarter of 2011. Cash flow from operations in the second quarter was $69 million, and capital expenditures were $14 million.
In addition, Robert Half paid a cash dividend of 14 cents per share to stockholders during the second quarter of 2011 for a total of $20 million and also repurchased 2 million shares of the company for $56 million. Approximately, 8.4 million shares remain available under its board approved stock repurchase plan.
Accounts receivables were $495 million at the end of the second quarter of 2011, with implied days outstanding of 48.1 days compared with 45.5 days at the end of the second quarter a year ago.
Guidance
For the third quarter of 2011, Robert Half forecasts earnings in the range of 24 cents to 29 cents a share, and projects revenues of $940 million−$990 million.
Going ahead, management expects to see a broad-based revenue growth and improving demand within its professional staffing operations and Protiviti.
Based in Menlo Park, California, Robert Half provides staffing and risk consulting services in North America, South America, Europe, Asia, and Australia. The company competes with Manpower Inc. (MAN).
