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Robert Half International (RHI) Q2 Earnings: What's in Store?

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Robert Half International Inc. (RHI - Free Report) is expected to report second-quarter 2018 results on Jul 24, after market close.

In the to-be-reported quarter, the company’s revenues are expected to be driven by strength across all the segments. Lower U.S tax rates are likely to have a positive impact on Robert Half’s earnings.

So far this year, shares of Robert Half have gained 23.3%, significantly outperforming the 6.6% rise of the industry it belongs to.

 

 

Let’s check out the expectations in detail.

Top Line Likely to Improve Year Over Year

The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.43 billion, mirroring a 9.1% increase year over year. Notably, the consensus estimate lies within the company’s guided range of $1.40-$1.46 billion.

The top line is expected to benefit from growth across the company’s U.S. as well as non-U.S. staffing and Protiviti operations. Favorable foreign currency movements are likely to act as another major tailwind.

Increase in average hourly bill rates and the number of hours worked by employees is expected to drive revenues at temporary and consultant staffing. Permanent placement staffing revenues are likely to be driven by growing number of placements and average fees per placement. At risk consulting and internal audit services, revenues should benefit from increase in billable hours. 

Additionally, Robert Half should benefit from the improving U.S. economy which has improved the employment scenario, and aided manufacturing and non-manufacturing activities.

In first-quarter 2018, revenues increased 8% year over year on a reported basis and 7% on a same day in constant currency.

Earnings Likely to Improve on Tax Reform

The Tax Cuts and Jobs Act, which reduced corporate tax rates significantly from 35% to 21%, is expected to boost Robert Half’s earnings in the to-be-reported quarter. The Zacks Consensus Estimate for the same is pegged at 85 cents, reflecting year-over-year growth of 32.8%. Notably, the consensus estimate lies within the company guided EPS range of 81-87 cents.

In first-quarter 2018, adjusted earnings rose 29% from the year-ago quarter to 80 cents per share.

Our Model Doesn’t Suggest a Beat

Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if the companies are witnessing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Robert Half has an Earnings ESP of 0.00% and a Zacks Rank #3, a combination that makes surprise prediction difficult.

Key Picks

Here are a few stocks from the broader Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings in second-quarter 2018:

Avis Budget Group (CAR - Free Report) has an Earnings ESP of +5.17% and a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Aug 7. You can see the complete list of today’s Zacks #1 Rank stocks here.

IQVIA Holdings (IQV - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #2. The company is slated to report quarterly results on Jul 24.

TransUnion (TRU - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank #3.The company is slated to report quarterly numbers on Jul 24.

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