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Manpower (MAN) Down 6.9% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for ManpowerGroup (MAN - Free Report) . Shares have lost about 6.9% in that time frame, outperforming the S&P 500.

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

ManpowerGroup Surpasses Q1 Earnings

ManpowerGroup reported impressive first-quarter 2022 results, with both earnings and revenues beating the Zacks Consensus Estimate.

Quarterly adjusted earnings of $1.88 per share beat the consensus mark by 20.5% and improved 69.4% year over year. The bottom line benefited from improvement in business mix and robust demand for higher margin offerings.

Revenues of $5.14 billion surpassed the consensus mark by 0.7% and inched up 4.5% year over year on a reported basis and 9.8% on a constant-currency (cc) basis. The top-line growth was driven by growth in higher-margin offerings and higher levels of permanent recruitment activity. Experis and Talent Solutions grew a respective 31% and 10% on a reported basis, and 15% and 13% on an organic constant currency basis (cc). Manpower declined 2% on a reported basis but was up 5% at organic cc.

Segmental Revenues

Revenues from America totaled $1.25 billion, up 24.8% year over year on a reported basis and 25.7% at cc. In the United States, revenues came in at $889.4 million, up 46.1% year over year. In the Other Americas subgroup, revenues of $361.8 million declined 8.2% on a reported basis and 5.9% at cc.

Revenues from Southern Europe were up 1.6% on a reported basis and 8.4% at cc to $2.19 billion. Revenues from France came in at $1.19 billion, up 0.3% on a reported basis and 7.7% at cc. Revenues from Italy amounted to $445 million, up 10.5% on a reported basis and 18.6% at cc. The Other Southern Europe sub segment generated revenues of $556.5 million, down 2.1% on a reported basis but up 2.7% at cc.

Northern Europe revenues moved down 3.5% on a reported basis but were up 2% at cc to $1.09 billion. APME revenues totaled $618.2 million, down 1.5% on a reported basis and 6% at cc.

Operating Performance

The company incurred operating profit of $138.7 million, up 40.9% year over year on a reported basis and 49.3% at cc. Operating profit margin of 2.7% increased 70 basis points year over year.

Balance Sheet and Cash Flow

ManpowerGroupexited the quarter with cash and cash equivalents balance of $777.3 million compared with the prior quarter’s level of $847.8 million. Long-term debt at the end of the quarter was $551.3 million compared with $565.7 million reported in the preceding quarter.

The company generated $70.6 million of cash from operating activities while Capex was $19.4 million in the quarter. It paid $59.9 million of common stock in the quarter.

Q2 Outlook

ManpowerGroup expects second-quarter 2022 earnings per share in the range of $2.31-$2.39.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, Manpower has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. 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. Notably, Manpower has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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