PREVIEW-On Assigment to post Q4 results in-line with estimates
* What: Q4 results
* When: Feb. 19, 2009
* Results expected to be in-line
BANGALORE, Feb 17 (Reuters) - Staffing company On Assignment Inc (ASGN.O) is expected to post quarterly results matching analysts' estimates as it benefits from a diversified client base and a small exposure to financial markets, even as the sector has been hit by firms cutting jobs and freezing recruitments.
However, with the U.S. economy sinking deeper into recession, the company will find it more difficult to match up to expectations in the future, analysts said.
Several staffing firms have been hit by the surge in job losses over the last few months as companies cut jobs or implemented hiring freezes in an attempt to reduce costs.
"With virtually no exposure to the financial-services industry, On Assignment was not impacted by the crisis in financial markets," Stifel Nicolaus analyst James Janesky wrote in a note to clients dated Jan. 26.
Janesky expects the company to earn 14 cents a share in the fourth quarter, while BMO Capital's Jeffrey Silber expects 13 cents a share.
According to Reuters Estimates, analysts on average expect earnings of 13 cents a share, before items.
On Assignment, which offers staffing services in the healthcare, and IT and engineering segments, competes with peers such as AMN Healthcare Inc (AHS.N) Cross Country Healthcare Inc (CCRN.O) and CDI Corp (CDI.N).
On Assignment caters to healthcare and physician staffing, which form about 29 percent and 14.5 percent of the company's total revenue, respectively.
Although demand for travel nurses has fallen sharply, physician staffing remained steady, analyst David Bachman from Longbow Research said in a note dated Feb. 9.
EMPLOYMENT TRENDS TO BITE
U.S. employers slashed 598,000 jobs in January, the biggest monthly loss in 34 years, sending the jobless rate to a 16-year peak of 7.6 percent, according to the Labor Department.
On Assignment's IT and engineering segment, which has historically proven to be economically sensitive as a sector, will be particularly affected, BMO's Silber said in a preview note dated Jan. 15. Continued...
