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Robert Half International (RHI) Q1 Earnings: What's in Store?

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Robert Half International Inc. (RHI - Free Report) is expected to report first-quarter 2018 results on Apr 19. Notably, the top- and bottom-line results of this leading staffing solutions provider surpassed the Zacks Consensus Estimate in two of the preceding four quarters.

Considering this, let’s delve into how things are shaping up for the upcoming announcement.

What to Expect

The Zacks Consensus Estimate for first-quarter earnings has been stable over the past 30 days at 73 cents. Projected earnings for the quarter depict year-over-year growth of 17.7%. Further, analysts polled by Zacks expect net sales of $1,358 million to be up 5.5% year over year.

The company expects revenues in the range of $1,335-$1,395 million for the said quarter. In addition, it envisions earnings in the range of 70-76 cents per share. Encouragingly, the mid-point of these projections reflects year-over-year top-line (constant currency) and bottom-line growth of 4.2% and 18%, respectively.

Notably, shares of Robert Half International have surged 32% over the past year, outperforming the 25.9% rally of the industry it belongs to.

 

Factors at Play

Robert Half’s international revenues have been increasing, courtesy of rising demand for professional staffing services. In fact, this has been a persistent trend since the first quarter of 2014. Also, the company’s temporary staffing services have been on the rise globally. This is because employers are building flexible staffing options in human resources plans.

Robert Half International Inc. Revenue (TTM)

 

In the meantime, the company has been investing heavily in tapping the evolving prospects in the technology staffing area, over the past few years. Such efforts are likely to continue favoring the company’s international revenues in the to-be-reported quarter.

In the fourth quarter, currency-neutral staffing revenues from international regions jumped 15% from the prior-year quarter. Also, international revenues grew 23% year on year in the Protiviti segment.

Furthermore, the latest tax reforms in the United States are expected to increase hiring activities. The benefits from lower tax rates may propel companies to allocate more capital for increasing headcount to support business growth. This, in turn, might significantly bolster Robert Half’s business in the forthcoming periods. 

These factors along with an overall improved economic scenario in the United States, encourages management about growth in the upcoming quarters. Moreover, the company’s investments in digital technology are expected to enhance service offerings to clients and candidates both in the United States and internationally.

Notably, in the fourth quarter, temporary and consulting staffing revenues improved 5.8% in December and 2% in the first two weeks of October. Also, permanent placement revenues advanced 7.2% in September while it increased 3.3% in the first three weeks of January.

What Does the Zacks Model Predict?

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.  Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Robert Half has a Zacks Rank #3 and an Earnings ESP of +0.00%, a combination that suggests that the company is unlikely to beat estimates.

Key Picks

Here are a few stocks from the broader Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings in first-quarter 2018:

Mastercard (MA - Free Report) has an Earnings ESP of +2.39% and a Zacks Rank #2. The company is slated to report quarterly numbers on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

FLEETCOR Technologies, Inc. (FLT - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank of 2. The company is expected to report quarterly numbers on May 7.

ManpowerGroup (MAN - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank #3. The company is slated to report quarterly results on Apr 20.

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