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How is Robert Half (RHI) Placed After Latest Tax Reforms?
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Robert Half International Inc. (RHI - Free Report) released updates about the impact of the recent tax reforms on its business operations. The company has declared reductions in the bottom-line projections for fourth-quarter 2017, thanks to anticipated non-cash charges against provision for income taxes. Robert half expects incurring the charges as a result of the provisions enlisted under the recently enacted Tax Cuts and Jobs Act (TCJA).
Per the recent tax reforms, Robert Half expects one-time charges of approximately $34-38 million (amounting to nearly 27-31 cents per share) to its provision for income taxes. Consequently, earnings are now estimated in the range of 29-39 cents, which marks a substantial decline from the previous range of 60-66 cents.
Further, the company has also released updates regarding the effective tax rate for 2018, in relation to the recent enactments under the TCJA. Robert Half now expects effective tax rates in the range of 26-28%. Notably, management’s tax projection for 2018 is pegged below the forecast for fourth-quarter 2017. Incidentally, during the third-quarter conference call, management projected effective tax rate for fourth-quarter 2017 to be approximately 37%.
Reduced tax rates for 2018 are likely to boost the company’s bottom line. Also, greater retention of profits will help the company allocate more funds toward corporate reformation and development efforts.
Can TCJA Improve Hiring Market Conditions?
It is not certain whether the ongoing tax reforms will lead to higher wages for workers in the United States. However, such moves are expected to create more jobs owing to positive impacts on the economic conditions. The benefits from lower tax rates may propel companies to allocate more capital for increasing headcount to support business growth. The above-mentioned factors can significantly bolster Robert Half’s business in the forthcoming periods.
While Robert Half’s U.S. revenues were soft in the third quarter, management noted that hiring market trends started improving in September and continued till October. Evidently, temporary and consulting staffing revenues grew 2.1% in September and 2% in the first two weeks of October. Also, permanent placement revenues advanced 7.2% in September and surged 21% in the first three weeks of October.
These factors along with an overall improved economic scenario in the United States, encourages management about business growth. Such positive trends have been boosting investor’s optimism in the stock. In the past six months shares of this Zacks Rank #3 (Hold) company have returned 16%, almost in line with the industry’s rally of 16.2%.
Automatic Data Processing delivered an average positive earnings surprise of 4.5% in the trailing four quarters. It has a long-term earnings growth rate of 10.3%.
Blucora pulled off an average positive earnings surprise of 23.7% in the trailing four quarters. It has a long-term earnings growth rate of 20%
Broadridge came up with an average positive earnings surprise of 12.8% in the trailing four quarters. It has a long-term earnings growth rate of 10%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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How is Robert Half (RHI) Placed After Latest Tax Reforms?
Robert Half International Inc. (RHI - Free Report) released updates about the impact of the recent tax reforms on its business operations. The company has declared reductions in the bottom-line projections for fourth-quarter 2017, thanks to anticipated non-cash charges against provision for income taxes. Robert half expects incurring the charges as a result of the provisions enlisted under the recently enacted Tax Cuts and Jobs Act (TCJA).
Per the recent tax reforms, Robert Half expects one-time charges of approximately $34-38 million (amounting to nearly 27-31 cents per share) to its provision for income taxes. Consequently, earnings are now estimated in the range of 29-39 cents, which marks a substantial decline from the previous range of 60-66 cents.
Further, the company has also released updates regarding the effective tax rate for 2018, in relation to the recent enactments under the TCJA. Robert Half now expects effective tax rates in the range of 26-28%. Notably, management’s tax projection for 2018 is pegged below the forecast for fourth-quarter 2017. Incidentally, during the third-quarter conference call, management projected effective tax rate for fourth-quarter 2017 to be approximately 37%.
Reduced tax rates for 2018 are likely to boost the company’s bottom line. Also, greater retention of profits will help the company allocate more funds toward corporate reformation and development efforts.
Can TCJA Improve Hiring Market Conditions?
It is not certain whether the ongoing tax reforms will lead to higher wages for workers in the United States. However, such moves are expected to create more jobs owing to positive impacts on the economic conditions. The benefits from lower tax rates may propel companies to allocate more capital for increasing headcount to support business growth. The above-mentioned factors can significantly bolster Robert Half’s business in the forthcoming periods.
While Robert Half’s U.S. revenues were soft in the third quarter, management noted that hiring market trends started improving in September and continued till October. Evidently, temporary and consulting staffing revenues grew 2.1% in September and 2% in the first two weeks of October. Also, permanent placement revenues advanced 7.2% in September and surged 21% in the first three weeks of October.
These factors along with an overall improved economic scenario in the United States, encourages management about business growth. Such positive trends have been boosting investor’s optimism in the stock. In the past six months shares of this Zacks Rank #3 (Hold) company have returned 16%, almost in line with the industry’s rally of 16.2%.
Looking For More? Check These Three Picks
Investors may also consider better-ranked stocks from the same sector such as Automatic Data Processing Inc. (ADP - Free Report) , Blucora Inc. and Broadridge Financial Solutions, Inc (BR - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Automatic Data Processing delivered an average positive earnings surprise of 4.5% in the trailing four quarters. It has a long-term earnings growth rate of 10.3%.
Blucora pulled off an average positive earnings surprise of 23.7% in the trailing four quarters. It has a long-term earnings growth rate of 20%
Broadridge came up with an average positive earnings surprise of 12.8% in the trailing four quarters. It has a long-term earnings growth rate of 10%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>