Manpower profit slumps on Europe, stronger dollar
NEW YORK |
NEW YORK (Reuters) - Global staffing services provider ManpowerGroup (MAN.N) on Friday reported a sharply lower quarterly profit as Europe's major economies weakened and a stronger dollar reduced results, but its earnings still topped Wall Street's estimates.
The U.S.-based company, which generates two-thirds of its sales in Europe, issued a third-quarter forecast that was below recently lowered analyst estimates, saying slower demand for its services, which include providing temporary workers, was not limited to Europe.
"We see this current downturn as quite different than what we experienced in 2008," Chief Executive Jeff Joerres said on a conference call. "There really is no major falloff but rather a slow decline of business that is holding true across all geographies at this time."
Net earnings fell 44 percent to $41 million, or 51 cents per share, from $72.7 million, or 87 cents per share, a year ago.
Excluding one-time reorganization and other charges, Manpower earned 76 cents a share, 5 cents ahead of average analyst estimates, according to Thomson Reuters I/B/E/S.
Sales fell 8 percent to $5.21 billion, meeting Wall Street estimates. Manpower's sales declined by double digits in France and Italy but fell by smaller amounts in northern Europe.
Milwaukee-based Manpower is less reliant on European markets than rival Randstad (RAND.AS), but more than Adecco (ADEN.VX) or any of its U.S.-listed peers. Its shares trade at a discount to U.S. peers as a result.
Manpower, whose clients include ABB (ABBN.VX), Deutsche Bank (DBKGn.DE), Novartis (NOVN.VX) and Cisco Systems (CSCO.O), said the stronger dollar lowered earnings by 7 cents in the quarter and will affect third-quarter earnings by 8 cents a share. The currency dropped more in value than the company had expected.
It forecast third-quarter profit of 64 cents to 72 cents a share, while analysts, who lowered forecasts in the lead-up to earnings, were expecting 79 cents per share.
(Reporting By Nick Zieminski; Editing by Chizu Nomiyama and Steve Orlofsky)
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