Manpower profit boosted by cost cuts; shares up

Fri Apr 19, 2013 10:23am EDT

(Reuters) - Global staffing company ManpowerGroup's (MAN.N) quarterly profit handily beat analysts' estimates despite falling revenue as margins stabilized on cost cuts, sending the stock up as much as 10 percent.

Manpower had first-quarter earnings of 63 cents per share, after adjusting for a charge of 32 cents per share related to office consolidations and severance costs. Analysts were looking for 45 cents per share.

Gross profit margin was stable at 16.6 percent.

"We continue to maintain our focus on price discipline, which is resulting in some stabilization of our gross profit in key markets," Chief Executive Jeffrey Joerres said on a post-earnings conference call with analysts.

BMO Capital analyst Jeffrey Silber, who has maintained his "outperform" rating on the stock, said the profit beat is attributable mainly to cost cutting, but it might have been helped by one-time charges.

The world's No.3 staffing company also forecast second-quarter adjusted earnings of 84 to 92 cents per share, above the average analyst forecast of 77 cents. It expects revenue to contract between 3 and 5 percent in the second quarter.

Revenue fell 6 percent in the first quarter to $4.77 billion, largely in line with analysts' average estimate of $4.76 billion, according to Thomson Reuters I/B/E/S.

Revenue from France, where most of the company's European business is concentrated, fell more than 11 percent to $1.15 billion in the quarter ended March 31.

Milwaukee, Wisconsin-based Manpower's net earnings fell to $23.9 million, or 31 cents per share, from $40.2 million, or 50 cents per share, a year earlier.

Manpower shares, which have gained about a fourth of their market value this year, were at $55.65 on Thursday morning on the New York Stock Exchange.

(Reporting by Ritika Rai in Bangalore; Editing by Sreejiraj Eluvangal)