* Sees fourth-quarter earnings of $0.72-$0.80 per share vs
* Third-quarter earnings $0.79 per share vs est $0.68
* Double-digit drop in sales in France and Italy
* Gross margin up 10 basis points to 16.6 pct
* Shares up as much as 14 pct
By Tej Sapru
Oct 19 Manpower Inc reported
higher-than-expected quarterly earnings and forecast a
fourth-quarter profit above Wall Street expectations, as the
global staffing company grew margins by dropping less-profitable
deals, even as it warned of lower demand from employers wary of
hiring in a weak economy.
Manpower shares were up 10 percent at $39.68 in afternoon
trading on the Nasdaq.
The world's No. 3 staffing company, which derives most of
its sales and profit overseas, has been under pressure from a
weak economy in Europe, where the ongoing crisis has seen many
companies cutting back on hiring.
"We are acting on the premise that we are entering a
prolonged period of soft economic conditions," Chief Executive
Jeffrey Joerres said on a post-earnings conference call.
Manpower generates about two-thirds of its sales in Europe
and suffered double-digit declines in sales in France and Italy,
dragging overall sales down 11 percent in the quarter.
Still, gross margins rose 10 basis points to 16.6 percent.
Avondale Partners analyst Randle Reece said Manpower was not
just responding to the macroeconomic trends, but trying to
change the way it does business.
"An important part of this is enforcing discipline in the
way they go to market ... Ensuring that their staff does not
sign deals with unattractive profit margins."
"In the Americas, they have been walking away from some
low-margin business," Reece said.
Manpower, whose clients include ABB, Deutsche Bank
, Novartis and Cisco Systems,
reported a 20 percent fall in net income to $63.1 million in the
third quarter ended Sept. 30.
However, earnings per share of 79 cents in the period came
in well ahead of Wall Street estimates of 68 cents per share,
according to Thomson Reuters I/B/E/S.
Sales at the Milwaukee, Wisconsin-based company fell 11
percent to $5.17 billion, but came in ahead of analysts
expectations of $5.11 billion.
Manpower now expects to earn between 72 cents and 80 cents
per share for the current quarter, above Wall Street estimates
of 70 cents per share.