Adecco upbeat on Europe, second-quarter profit beats
ZURICH (Reuters) - Adecco (ADEN.VX), the world's largest staffing company, said labor markets in austerity-ravaged Europe are starting to stabilize and reported higher-than-expected net profit in the second quarter.
Recent economic data suggesting the euro zone might come out of recession later this year is welcome news for Adecco, which makes roughly 45 percent of revenues in the area.
The number of jobless in the single-currency bloc fell for the first time in more than two years in June, while business surveys show manufacturing activity is growing again.
"Labor markets are starting to stabilize around Europe and we see some more positive signs in our business," Chief Executive Patrick De Maeseneire said in a statement.
Revenues at the Swiss firm fell 3 percent in the quarter to 4.931 billion euros ($6.57 billion), in line with the Reuters analyst consensus of 4.935 billion euros.
This marked the sixth consecutive quarterly fall but was an improvement on the 7 percent decline in organic growth in the first quarter.
Adecco said revenues were down 2 percent organically in June, and this steady improvement was encouraging for the second half.
The staffing sector is generally considered a snapshot of economic health because firms tend to hire temporary workers at the start of a recovery, when employers are reluctant to add to their permanent headcount.
Dutch rival Randstad (RAND.AS) and U.S. firm ManpowerGroup Inc (MAN.N) beat forecasts for second-quarter earnings this month, and issued more upbeat outlooks for European economies.
Net profit jumped 12 percent to 126 million euros in the quarter, beating forecasts for 112 million.
Adecco confirmed its target for an earnings before income tax and amortization (EBITA) margin of 5.5 percent by 2015. It said it planned a new share buyback program of up to 250 million euros.
($1 = 0.7508 euros)
(Reporting by Caroline Copley; Editing by David Cowell)