ManpowerGroup Inc. (MAN - Free Report) reported better-than-expected fourth-quarter 2019 results.
The stock grew 6.6% since it reported quarterly results as EPS guidance for first-quarter 2020 was encouraging. The company anticipates EPS in the range of $1.33-$1.41, the midpoint of which ($1.37) is above the Zacks Consensus Estimate of $1.35.
The stock has gained 24.5% over the past year, against the 7.3% decline of the industry it belongs to.
Quarterly adjusted earnings of $2.15 per share surpassed the Zacks Consensus Estimate by 5.4% but declined 11.9% year over year. Earnings came above the guided range of $2-$2.08 per share.
Revenues of $5.2 billion marginally beat the consensus mark but declined 3.6% year over year on a reported basis and 2% on a constant-currency basis. Challenging market environment in Europe continues to weigh on the company’s top line.
Let’s delve deeper into the numbers.
Segmental Revenues
Revenues from America totaled $1.06 billion, up 1.6% year over year on a reported basis and 3.2% on a constant-currency basis. In the United States, revenues came in at $626.8 million, down 0.9% both on reported and constant-currency basis. In the Other Americas subgroup, revenues of $434.1 million increased 5.4% on a reported basis and 9.5% on a constant-currency basis. Americas contributed 20% to total revenues.
Revenues from Southern Europe were up 1.4% on a reported basis and 3.9% on a constant-currency basis to $2.33 billion. Revenues from France came in at $1.36 billion, down 5.2% on a reported basis and 2.3% on a constant-currency basis. Revenues from Italy were $380 million, down 5.9% on a reported basis and 3% on a constant-currency basis. The Other Southern Europe subsegment generated revenues of $589.4 million, up 28.2% on a reported basis and 29.3% on a constant-currency basis. Southern Europe contributed 45% to total revenues.
Northern Europe revenues declined 8.7% on a reported basis and 6.4% on a constant-currency basis to $1.16 billion. The segment accounted for 22% of total revenues in the quarter.
APME revenues totaled $596.5 million, down 18.5% on a reported basis and 19.4% on a constant-currency basis. The segment contributed 12% to total revenues.
Revenues from the Right Management business were up 3.8% year over year on a reported basis and 4.6% on a constant-currency basis to $52 million.The segment contributed 1% to total revenues.
ManpowerGroup Inc. Revenue (TTM)
Operating Performance
Gross profit in the fourth quarter was $859.6 million, down 2.4% year over year on a reported basis and 0.5% on a constant-currency basis. Gross profit margin came in at 16.5%, up 20 basis points (bps) year over year.
Operating profit of $191.6 million decreased 12.1% year over year on a reported basis and 10% on a constant-currency basis. Operating profit margin came in at 3.7%, down 30 bps year over year.
Balance Sheet and Cash Flow
ManpowerGroup exited the fourth quarter with cash and cash equivalents balance of $1.03 billion compared with $807.1 million in the prior quarter. Long-term debt at the end of the quarter was $1.01 billion, compared with $983.2 million in the preceding quarter.
The company generated $319 million of cash from operating activities and Capex was $16.7 million in the quarter. ManpowerGroup repurchased $51 million of common stock and paid out dividends of $64.1 million in the quarter.
First-Quarter 2020 Outlook
The company expects revenues to be down 2% to flat on a constant-currency basis. It anticipates income tax rate in the first quarter to be around 35.5%.
Zacks Rank &Stocks to Consider
ManpowerGroup currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Waste Management (WM - Free Report) , S&P Global (SPGI - Free Report) and Fidelity National Information Services (FIS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings (three to five years) growth rate for Waste Management, S&P Global and Fidelity National Information Services is estimated at 8.2%, 10% and 8.9%, respectively.
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ManpowerGroup Inc. (MAN - Free Report) reported better-than-expected fourth-quarter 2019 results.
The stock grew 6.6% since it reported quarterly results as EPS guidance for first-quarter 2020 was encouraging. The company anticipates EPS in the range of $1.33-$1.41, the midpoint of which ($1.37) is above the Zacks Consensus Estimate of $1.35.
The stock has gained 24.5% over the past year, against the 7.3% decline of the industry it belongs to.
Quarterly adjusted earnings of $2.15 per share surpassed the Zacks Consensus Estimate by 5.4% but declined 11.9% year over year. Earnings came above the guided range of $2-$2.08 per share.
Revenues of $5.2 billion marginally beat the consensus mark but declined 3.6% year over year on a reported basis and 2% on a constant-currency basis. Challenging market environment in Europe continues to weigh on the company’s top line.
Let’s delve deeper into the numbers.
Segmental Revenues
Revenues from America totaled $1.06 billion, up 1.6% year over year on a reported basis and 3.2% on a constant-currency basis. In the United States, revenues came in at $626.8 million, down 0.9% both on reported and constant-currency basis. In the Other Americas subgroup, revenues of $434.1 million increased 5.4% on a reported basis and 9.5% on a constant-currency basis. Americas contributed 20% to total revenues.
Revenues from Southern Europe were up 1.4% on a reported basis and 3.9% on a constant-currency basis to $2.33 billion. Revenues from France came in at $1.36 billion, down 5.2% on a reported basis and 2.3% on a constant-currency basis. Revenues from Italy were $380 million, down 5.9% on a reported basis and 3% on a constant-currency basis. The Other Southern Europe subsegment generated revenues of $589.4 million, up 28.2% on a reported basis and 29.3% on a constant-currency basis. Southern Europe contributed 45% to total revenues.
Northern Europe revenues declined 8.7% on a reported basis and 6.4% on a constant-currency basis to $1.16 billion. The segment accounted for 22% of total revenues in the quarter.
APME revenues totaled $596.5 million, down 18.5% on a reported basis and 19.4% on a constant-currency basis. The segment contributed 12% to total revenues.
Revenues from the Right Management business were up 3.8% year over year on a reported basis and 4.6% on a constant-currency basis to $52 million.The segment contributed 1% to total revenues.
ManpowerGroup Inc. Revenue (TTM)
Operating Performance
Gross profit in the fourth quarter was $859.6 million, down 2.4% year over year on a reported basis and 0.5% on a constant-currency basis. Gross profit margin came in at 16.5%, up 20 basis points (bps) year over year.
Operating profit of $191.6 million decreased 12.1% year over year on a reported basis and 10% on a constant-currency basis. Operating profit margin came in at 3.7%, down 30 bps year over year.
Balance Sheet and Cash Flow
ManpowerGroup exited the fourth quarter with cash and cash equivalents balance of $1.03 billion compared with $807.1 million in the prior quarter. Long-term debt at the end of the quarter was $1.01 billion, compared with $983.2 million in the preceding quarter.
The company generated $319 million of cash from operating activities and Capex was $16.7 million in the quarter. ManpowerGroup repurchased $51 million of common stock and paid out dividends of $64.1 million in the quarter.
First-Quarter 2020 Outlook
The company expects revenues to be down 2% to flat on a constant-currency basis. It anticipates income tax rate in the first quarter to be around 35.5%.
Zacks Rank &Stocks to Consider
ManpowerGroup currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Waste Management (WM - Free Report) , S&P Global (SPGI - Free Report) and Fidelity National Information Services (FIS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings (three to five years) growth rate for Waste Management, S&P Global and Fidelity National Information Services is estimated at 8.2%, 10% and 8.9%, respectively.
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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