Robert Half International Inc. (RHI - Free Report) reported mixed first-quarter 2020 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same.
Quarterly earnings of 79 cents per share missed the consensus mark by 2.5% and were down 15% year over year. Revenues of $1.51 billion marginally beat the consensus mark and increased 3% year over year on a reported basis and 2% on an as-adjusted basis.
Notably, the company’s shares have depreciated 30.5% over the past year compared with the 42.5% decline of the industry it belongs to.
Staffing Revenues Decline, Protiviti Up Significantly
Global Staffing revenues of $1.21 billion declined 0.3% year over year on a reported basis and 1% on an as-adjusted basis. This decline was mainly due to the negative impact of COVID-19 on staffing operations. The U.S. staffing revenues of $944 million were down 0.2% on an adjusted basis. Non-U.S. staffing revenues were down 4% on an as-adjusted basis to $269 million. Currency movements had an unfavorable impact of 0.7% on staffing revenues.
The quarter had 63.1 billing days compared with 62.2 billing days in the year-ago quarter. At present, Robert Half operates 327 staffing locations worldwide, with 88 locations situated in 17 countries outside the United States.
Protiviti revenues came in at $294 million, which increased 16.5% year over year on a reported basis and 15% on an as-adjusted basis. This increase was driven by strength across internal audit, technology consulting and regulatory compliance consulting, and services provided jointly with staffing. The U.S. and non-U.S. Protiviti revenues increased a respective 20% and 2%, year over year, on an as-adjusted basis.
Currency movement lowered revenue growth by 0.6% on a year-over-year basis. Currently, Protiviti, along with its independently-owned Member Firms, has a network of 86 locations in 27 countries.
Robert Half International Inc. Revenue (TTM)
Costs Escalate, Margins Shrink
Gross profit in the quarter was $610.7 million, up 0.5% year over year. Gross margin of 40.5% shrunk 90 basis points (bps) year over year. Operating income of $131.1 million was down 10.3% year over year. Operating margin declined to 8.7% from the year-ago quarter’s 10%.
Selling, general and administrative expenses as percentage of total revenues were 31.8%, up 40 bps year over year. The upswing resulted from negative leverage as revenues declined in response to the pandemic.
Key Balance Sheet & Cash Flow Figures
Robert Half ended the first quarter with cash and cash equivalents of $249.9 million compared with the $270.5 million witnessed at the end of the previous quarter. Cash flow from operations was $125 million and capital expenditures were $14 million in the quarter.
In the March-end quarter, Robert Half bought back around 1 million shares for $51 million. It paid out $40 million in dividends.
Currently, Robert Half carries a Zacks Rank #5 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax Inc. (EFX - Free Report) reported first-quarter 2020 adjusted earnings of $1.40 per share that beat the Zacks Consensus Estimate by 8.5% and improved 16% on a year-over-year basis. Revenues of $957.9 million outpaced the consensus estimate by 4.2% and improved 13% year over year on a reported basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) delivered first-quarter 2020 adjusted earnings of 11 cents per share beating the consensus mark by 22.2% and being flat on a year-over-year basis. Net revenues of $1.97 billion beat the consensus estimate by 1.6% but decreased 16.5% on a year-over-year basis.
IHS Markit Ltd. recorded first-quarter fiscal 2020 adjusted earnings per share of 66 cents that surpassed the consensus estimate by 4.8% and increased 10% on a year-over-year basis. Total revenues came in at $1.08 billion, marginally missing the consensus mark but improving 3% from the year-ago quarter.
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Robert Half International Inc. (RHI - Free Report) reported mixed first-quarter 2020 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same.
Quarterly earnings of 79 cents per share missed the consensus mark by 2.5% and were down 15% year over year. Revenues of $1.51 billion marginally beat the consensus mark and increased 3% year over year on a reported basis and 2% on an as-adjusted basis.
Notably, the company’s shares have depreciated 30.5% over the past year compared with the 42.5% decline of the industry it belongs to.
Staffing Revenues Decline, Protiviti Up Significantly
Global Staffing revenues of $1.21 billion declined 0.3% year over year on a reported basis and 1% on an as-adjusted basis. This decline was mainly due to the negative impact of COVID-19 on staffing operations. The U.S. staffing revenues of $944 million were down 0.2% on an adjusted basis. Non-U.S. staffing revenues were down 4% on an as-adjusted basis to $269 million. Currency movements had an unfavorable impact of 0.7% on staffing revenues.
The quarter had 63.1 billing days compared with 62.2 billing days in the year-ago quarter. At present, Robert Half operates 327 staffing locations worldwide, with 88 locations situated in 17 countries outside the United States.
Protiviti revenues came in at $294 million, which increased 16.5% year over year on a reported basis and 15% on an as-adjusted basis. This increase was driven by strength across internal audit, technology consulting and regulatory compliance consulting, and services provided jointly with staffing. The U.S. and non-U.S. Protiviti revenues increased a respective 20% and 2%, year over year, on an as-adjusted basis.
Currency movement lowered revenue growth by 0.6% on a year-over-year basis. Currently, Protiviti, along with its independently-owned Member Firms, has a network of 86 locations in 27 countries.
Robert Half International Inc. Revenue (TTM)
Costs Escalate, Margins Shrink
Gross profit in the quarter was $610.7 million, up 0.5% year over year. Gross margin of 40.5% shrunk 90 basis points (bps) year over year. Operating income of $131.1 million was down 10.3% year over year. Operating margin declined to 8.7% from the year-ago quarter’s 10%.
Selling, general and administrative expenses as percentage of total revenues were 31.8%, up 40 bps year over year. The upswing resulted from negative leverage as revenues declined in response to the pandemic.
Key Balance Sheet & Cash Flow Figures
Robert Half ended the first quarter with cash and cash equivalents of $249.9 million compared with the $270.5 million witnessed at the end of the previous quarter. Cash flow from operations was $125 million and capital expenditures were $14 million in the quarter.
In the March-end quarter, Robert Half bought back around 1 million shares for $51 million. It paid out $40 million in dividends.
Currently, Robert Half carries a Zacks Rank #5 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax Inc. (EFX - Free Report) reported first-quarter 2020 adjusted earnings of $1.40 per share that beat the Zacks Consensus Estimate by 8.5% and improved 16% on a year-over-year basis. Revenues of $957.9 million outpaced the consensus estimate by 4.2% and improved 13% year over year on a reported basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) delivered first-quarter 2020 adjusted earnings of 11 cents per share beating the consensus mark by 22.2% and being flat on a year-over-year basis. Net revenues of $1.97 billion beat the consensus estimate by 1.6% but decreased 16.5% on a year-over-year basis.
IHS Markit Ltd. recorded first-quarter fiscal 2020 adjusted earnings per share of 66 cents that surpassed the consensus estimate by 4.8% and increased 10% on a year-over-year basis. Total revenues came in at $1.08 billion, marginally missing the consensus mark but improving 3% from the year-ago quarter.
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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