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Manpower (MAN) Up 4.6% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for ManpowerGroup (MAN - Free Report) . Shares have added about 4.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Manpower due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

ManpowerGroup Beats On Q1 Earnings & Revenues Estimates

ManpowerGroup reported better-than-expected first-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.

Quarterly adjusted earnings of $1.11 per share beat the consensus mark by 68.2%. Moreover, the bottom line increased 35.4% year over year, driven by favourable foreign currency rate.

Revenues of $4.92 billion beat the consensus mark by 5.6%. The top line inched up 7% year over year on a reported basis and 1% on a constant-currency (cc) basis.

Segmental Revenues

Revenues from America totalled $1,002.9 million, down 0.8% year over year on a reported basis but up 1.1% at cc. In the United States, revenues came in at $608.8 million, down 0.3% year over year. In the Other Americas subgroup, revenues of $394.1 million fell 1.5% on a reported basis but increased 3.3% at cc. Americas contributed 20.4% to total revenues.

Revenues from Southern Europe were up 11.1% on a reported basis and 2% at cc to $2.16 billion. Revenues from France came in at $1.2 billion, up 8.7% on a reported basis but down 0.5% at cc. Revenues from Italy amounted to $402.8 million, up 22.9% on a reported basis and 12.5% at cc. The Other Southern Europe sub segment generated revenues of $568.6 million, up 8.7% on a reported basis and 0.8% at cc. Southern Europe contributed 44% to total revenues.

Northern Europe revenues moved up 6.1% on a reported basis but slipped 2.3% at cc to $1.13 billion. The segment contributed 23% to total revenues in the quarter.

APME revenues totaled $627.4 million, up 5.5% on a reported basis and 0.3% at cc. The segment contributed 12.7% to total revenues.

Operating Performance

Gross profit in the quarter was $768.1 million, up 6.1% year over year on a reported basis and 0.5% at cc. Gross profit margin came in at 15.6%, down 10 basis points (bps) year over year.

The company incurred operating profit of $98.4 million, up 100% year over year. Operating profit margin expanded 120 bps year over year.

Balance Sheet and Cash Flow

ManpowerGroup, exited the quarter with cash and cash equivalents balance of $1.52 billion compared with the prior quarter’s level of $1.56 billion. Long-term debt at the end of the quarter was $1.06 billion compared with the $1.10 billion reported in the preceding quarter.

The company used $795.5 million of cash from operating activities, while Capex was $38 million in the quarter.

Q2 Guidance

ManpowerGroup expects earnings per share in the range of $1.36-$1.44.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 29.34% due to these changes.

VGM Scores

At this time, Manpower has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Manpower has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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