ManpowerGroup profit jumps as restructuring gains pace
(Reuters) - ManpowerGroup Inc (MAN.N), the world's third-largest staffing company, reported a quarterly profit that blew past market expectations as a restructuring program began to bear fruit, sending its shares up as much as 7 percent.
The company, which received more than half of its revenue from Europe in the second quarter, also said it expects hiring to pick up as European economy shows fewer signs of volatility.
"You can see growth (in Europe) but it's going to be slow growth," Chief Executive Jeffrey Joerres said.
"But from our perspective, small growth can benefit us disproportionately well, because companies will still hesitate to bring on full-time staff as there's no market certainty."
The company had started closing offices as the euro-zone debt crisis paralyzed job markets, hurting the company's revenue and those of rivals such as Switzerland-based Adecco (ADEN.VX) and Dutch group Randstad (RAND.AS).
"It looks like they are pulling out of the slowdown," Avondale Partners analyst Randle Greece said, crediting the cost cutting that was running ahead of schedule.
ManpowerGroup, whose clients include Deutsche Bank (DBKGn.DE), Novartis (NOVN.VX) and Cisco Systems (CSCO.O) cut its general expenses by $50 million to $688 million in the second quarter.
The Milwaukee, Wisconsin-based company also forecast third-quarter earnings of $1.02-$1.10 per share, above Wall Street's average estimate of 91 cents per share.
Net income in the second quarter ended June 30 rose to $68.2 million, or 87 cents per share, from $41.0 million, or 51 cents per share, a year earlier.
Excluding restructuring costs, the company earned $1.05 per share. Analysts on average expected earnings of 89 cents per share, according to Thomson Reuters I/B/E/S.
Revenue fell 3 percent to $5.04 billion, almost in line with analysts' expectations.
Revenue from its biggest market segment - Southern Europe - fell 4.7 percent to $1.90 billion, while revenue from Northern Europe fell 1.2 percent to $1.4 billion.
Shares of the company were trading at $65.55 on the New York Stock Exchange in afternoon trading.
(Reporting by Rohit T K and Mridhula Raghavan in Bangalore; Editing by Maju Samuel and Don Sebastian)