Despite continued weakness and uneven global market conditions, ManpowerGroup, Inc. (MAN Quick QuoteMAN - Free Report) reported better-than-expected earnings in the third-quarter of 2016, which also marks its 28th consecutive quarter of an earnings beat. The company reported earnings per share of $1.87, beating the Zacks Consensus Estimate of $1.72 and increasing 16.1% year over year. Following the results, the company’s shares jumped nearly 10% on Oct 21.

However, the quarterly earnings were hurt by 3 cents due to foreign currency headwinds. On a currency-neutral basis, the bottom line surged 18% year over year.

Moreover, ManpowerGroup’s top line came ahead of the Zacks Consensus Estimate, after missing the same in the trailing four quarters. The company’s revenue came in at $5,088.2 million, surpassing the Zacks Consensus Estimate of $4,934 million and also increased 2.3% year over year. However, forex headwinds hampered top-line growth. On a constant currency basis, revenues rose 4%.

Gross profit inched up 0.7% (up 1.9% in constant currency) to $858.3 million, while gross margin came in at 16.9%, down 20 basis points (bps) year over year. In the reported quarter, staffing gross margin had a 40 bps impact on overall gross margin, primarily due to business mix and increase in direct costs. Operating profit of $211.1 million increased 2.3% (up 3.7% in constant currency) from the year-ago quarter, whereas operating margin came in at 4.1%, flat year over year.

Performance of the Segments

Revenues from the United States fell 6% year over year to $723.7 million primarily impacted by decline in demand of the company’s services owing to continued weakness in the manufacturing business of the U.S. Moreover, the segment’s operating profit slumped 9.9% from the prior-year figure to $41 million.

In Other Americas, revenues surged 4.5% (up 15.7% in constant currency) to $383.7 million, while operating profit jumped 5.5% (up 17.1% in constant currency) to $14 million.

In France, revenues increased 2.8% year over year (up 2.5% in constant currency) to $ 1,277.8 million, while operating profit declined 8.1% (down 8.3% in constant currency) to $68.9 million.

In Italy, revenues declined 7.8% year over year (down 8.1% in constant currency) to $299 million. The segment’s operating profit rose 5.1% (up 4.8% in constant currency) to $18.4 million.

In Other Southern Europe, revenues grew 6.9% (up 6.6% in constant currency) to $389.5 million. Operating profit went up 4.9% (up 4.6% in constant currency) to $13.7 million.

In Northern Europe, revenues gained 2.6% (up 8.8% in constant currency) to $1,300.1 million, while operating profit soared 21.1% (up 28.4% in constant currency) to $53.9 million, both on a year-over-year basis.

In APME (Asia Pacific Middle East), revenues climbed 14.1% to $650.9 million (up 6.5% in constant currency) year over year. The segment’s operating profit grew 6.5% (inched up 0.3% in constant currency) to $25.3 million year over year.

Also, revenues from Right Management decreased 5% (down 3.7% in constant currency) year over year to $63.5 million. The company’s operating income plunged 17.8% to $8.8 million (down 18.3% in constant currency) from the year-ago period.

Other Financial Details

ManpowerGroup ended the quarter with cash and cash equivalents of $503.1 million, long-term debt of $839.7 million and shareholders’ equity of $2,392 million.

The company generated cash worth $402.5 million from operating activities and incurred capital expenditure of $42.6 million during the first nine months of 2016.

Additionally, during the third quarter, the company repurchased 2.6 million for about $172 million. At the end of the reported quarter, it had 5 million shares remaining under its 6 million buyback authorization made in Jul 2016.

Guidance

Despite volatile macroeconomic conditions, the company remains optimistic about its future performance on the back of its strategic initiatives.

Including a negative effect of 2 cents from foreign exchange, ManpowerGroup expects the fourth quarter of 2016 earnings per share in the range of $1.65–$1.73. The Zacks Consensus Estimate for the third quarter stands at $1.69.

On a constant currency basis the company anticipates revenue growth in the range of 1–3%.

On the basis of constant currency the company estimates revenue growth in Americas to be flat year over year while Southern Europe as well as Northern Europe are expected grow in the lower single-digit range. Revenues from Right Management are projected to decline in the mid single-digits.

ManpowerGroup currently carries a Zacks Rank #3 (Hold). Now it is to be seen whether other staffing companies like Robert Half International Inc. (RHI Quick QuoteRHI - Free Report) , Insperity, Inc. (NSP Quick QuoteNSP - Free Report) and Kelly Services, Inc. (KELYA Quick QuoteKELYA - Free Report) which are yet to report their quarterly numbers can surpass the estimate or not. All these stocks also currently carry a Zacks Rank #3. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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