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Robert Half (RHI) Tops Q2 Earnings and Revenue Estimates
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Robert Half International Inc. (RHI - Free Report) reported strong second-quarter 2018 results with earnings and revenues surpassing the Zacks Consensus Estimate. In response to the better-than-expected results, shares jumped 3.6% in after-hours trading yesterday.
Earnings per share (EPS) of 89 cents beat the Zacks Consensus Estimate by 4 cents and increased 39.1% year over year. The reported figure also exceeded the company guided EPS range of 81-87 cents.
Total revenues of $1.46 billion outpaced the consensus mark by $29.5 million. The top line increased 11.4% year over year on a reported basis and 9.6% on an adjusted basis. Notably, revenues came in at the higher end of the $1.40-$1.46 billion guided range.
Quarterly results benefited from growth across the company’s U.S. as well as non-U.S. staffing and Protiviti operations and positive business sentiment across the company’s small and midsize client base. A robust job market and favorable economic conditions acted as other major tailwinds for the company’s performance.
So far this year, shares of Robert Half have gained 24.2%, significantly outperforming the 7.8% rise of the industry it belongs to.
Let’s delve deeper into the numbers.
Solid Segmental Performance
Based on the nature of services, Robert Half has three reportable operating segments namely, Temporary and Consultant Staffing, Permanent Placement Staffing and Risk Consulting and Internal Audit Services. While revenues from Temporary and Consultant Staffing and Permanent Placement Staffing come under the global staffing division, the same from Risk Consulting and Internal Audit Services are reported under the Protiviti division.
Global Staffing Division: Staffing revenues of $1.2 billion improved 10.1% year over year on a reported basis and 8.8% on an adjusted basis. U.S. staffing revenues of $930 million, increased 6.7% on a reported basis and 6.4% on an adjusted basis. Non-U.S. staffing revenues increased 22.4% on a reported basis and 17% on an adjusted basis to $293 million.
Currency movements had a favorable impact of 1.4% on reported staffing revenue growth. Second-quarter 2018 had 63.5 billing days compared with 63.3 days in second-quarter 2017. At present, Robert Half operates 325 staffing locations with 86 locations situated in 17 countries outside the United States.
Protiviti: Protiviti revenues were $234 million, which improved 18.5% year over year on a reported basis and 14.2% on an adjusted basis, with strength across both the U.S. and non-U.S. regions. U.S. revenues at the segment grew 11.8% on a reported basis and 11.5% on an adjusted basis to $184 million. The same from international regions surged 51.9% on a reported basis and 25.5% on an adjusted basis to $50 million.
Currency movement boosted segmental revenue growth by 1.2% on a year-over-year basis. Currently, Protiviti along with its independently-owned Member Firms has a network of 81 locations in 25 countries.
Gross profit in the second quarter came in at $607.1 million, up 12.8% year over year. Gross margin increased to 41.7% from 41.2% in the year-ago quarter.
Staffing gross margin expanded 70 bps year over year to 44.4%. Protiviti gross margin rose to 27.3% from 26.7% in the year-ago quarter.
Operating income came in at $149.5 million, up 14.4% year over year. Operating margin was 10.3% compared with 10% in the year-ago quarter.
At the staffing division, operating income increased 15% year over year to $134 million. Operating margin was 10.7%. Protiviti reported operating income of $18.5 million, which grew 11.5% from the year-ago quarter. Protiviti produced an operating margin of 7.9%.
Selling, general and administrative expenses increased 12.2% year over year to $457.6 million.
Balance Sheet
Robert Half ended the second quarter with cash and cash equivalents of $308.7 million compared with $291.9 million at the end of the previous quarter. Cash flow from operations was $148 million compared with $116 millionin the last quarter. Capital expenditures of $9 million rose $1 million from the previous quarter.
In the reported quarter, Robert Half bought back 1.1 million shares for $76 million. The company had 10.1 million shares available for repurchase under its repurchase plan as approved by the board of directors.
The company also paid a cash dividend of 28 cents per share in June, which sums up to a total payment of $34 million.
Q3 Guidance
Robert Half expects third-quarter 2018 revenues in the range of $1.43-$1.49 billion. The Zacks Consensus Estimate of $1.43 billion is in line with the lower end of the currently guided range.
Earnings are anticipated in the band of 88-94 cents per share. The Zacks Consensus Estimate of 88 cents is in line with the lower end of the currently guided range.
Encouragingly, the mid-point of these projections reflects year-over-year top- (on a same-day, as-adjusted basis, including Protiviti) and bottom-line growth of 10% and 34%, respectively.
Investors interested in the broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Republic Services (RSG - Free Report) , S&P Global (SPGI - Free Report) and FTI Consulting (FCN - Free Report) . All the companies are slated to report their quarterly numbers on Jul 26.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Robert Half (RHI) Tops Q2 Earnings and Revenue Estimates
Robert Half International Inc. (RHI - Free Report) reported strong second-quarter 2018 results with earnings and revenues surpassing the Zacks Consensus Estimate. In response to the better-than-expected results, shares jumped 3.6% in after-hours trading yesterday.
Earnings per share (EPS) of 89 cents beat the Zacks Consensus Estimate by 4 cents and increased 39.1% year over year. The reported figure also exceeded the company guided EPS range of 81-87 cents.
Total revenues of $1.46 billion outpaced the consensus mark by $29.5 million. The top line increased 11.4% year over year on a reported basis and 9.6% on an adjusted basis. Notably, revenues came in at the higher end of the $1.40-$1.46 billion guided range.
Quarterly results benefited from growth across the company’s U.S. as well as non-U.S. staffing and Protiviti operations and positive business sentiment across the company’s small and midsize client base. A robust job market and favorable economic conditions acted as other major tailwinds for the company’s performance.
So far this year, shares of Robert Half have gained 24.2%, significantly outperforming the 7.8% rise of the industry it belongs to.
Let’s delve deeper into the numbers.
Solid Segmental Performance
Based on the nature of services, Robert Half has three reportable operating segments namely, Temporary and Consultant Staffing, Permanent Placement Staffing and Risk Consulting and Internal Audit Services. While revenues from Temporary and Consultant Staffing and Permanent Placement Staffing come under the global staffing division, the same from Risk Consulting and Internal Audit Services are reported under the Protiviti division.
Global Staffing Division: Staffing revenues of $1.2 billion improved 10.1% year over year on a reported basis and 8.8% on an adjusted basis. U.S. staffing revenues of $930 million, increased 6.7% on a reported basis and 6.4% on an adjusted basis. Non-U.S. staffing revenues increased 22.4% on a reported basis and 17% on an adjusted basis to $293 million.
Currency movements had a favorable impact of 1.4% on reported staffing revenue growth. Second-quarter 2018 had 63.5 billing days compared with 63.3 days in second-quarter 2017. At present, Robert Half operates 325 staffing locations with 86 locations situated in 17 countries outside the United States.
Protiviti: Protiviti revenues were $234 million, which improved 18.5% year over year on a reported basis and 14.2% on an adjusted basis, with strength across both the U.S. and non-U.S. regions. U.S. revenues at the segment grew 11.8% on a reported basis and 11.5% on an adjusted basis to $184 million. The same from international regions surged 51.9% on a reported basis and 25.5% on an adjusted basis to $50 million.
Currency movement boosted segmental revenue growth by 1.2% on a year-over-year basis. Currently, Protiviti along with its independently-owned Member Firms has a network of 81 locations in 25 countries.
Robert Half International Inc. Revenue (TTM)
Robert Half International Inc. Revenue (TTM) | Robert Half International Inc. Quote
Operating Results
Gross profit in the second quarter came in at $607.1 million, up 12.8% year over year. Gross margin increased to 41.7% from 41.2% in the year-ago quarter.
Staffing gross margin expanded 70 bps year over year to 44.4%. Protiviti gross margin rose to 27.3% from 26.7% in the year-ago quarter.
Operating income came in at $149.5 million, up 14.4% year over year. Operating margin was 10.3% compared with 10% in the year-ago quarter.
At the staffing division, operating income increased 15% year over year to $134 million. Operating margin was 10.7%. Protiviti reported operating income of $18.5 million, which grew 11.5% from the year-ago quarter. Protiviti produced an operating margin of 7.9%.
Selling, general and administrative expenses increased 12.2% year over year to $457.6 million.
Balance Sheet
Robert Half ended the second quarter with cash and cash equivalents of $308.7 million compared with $291.9 million at the end of the previous quarter. Cash flow from operations was $148 million compared with $116 millionin the last quarter. Capital expenditures of $9 million rose $1 million from the previous quarter.
In the reported quarter, Robert Half bought back 1.1 million shares for $76 million. The company had 10.1 million shares available for repurchase under its repurchase plan as approved by the board of directors.
The company also paid a cash dividend of 28 cents per share in June, which sums up to a total payment of $34 million.
Q3 Guidance
Robert Half expects third-quarter 2018 revenues in the range of $1.43-$1.49 billion. The Zacks Consensus Estimate of $1.43 billion is in line with the lower end of the currently guided range.
Earnings are anticipated in the band of 88-94 cents per share. The Zacks Consensus Estimate of 88 cents is in line with the lower end of the currently guided range.
Encouragingly, the mid-point of these projections reflects year-over-year top- (on a same-day, as-adjusted basis, including Protiviti) and bottom-line growth of 10% and 34%, respectively.
Zacks Rank & Upcoming Releases
Robert Half currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Republic Services (RSG - Free Report) , S&P Global (SPGI - Free Report) and FTI Consulting (FCN - Free Report) . All the companies are slated to report their quarterly numbers on Jul 26.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>