October 22, 2018 – ManpowerGroup / (NYSE:MAN) posted third quarter revenues of $5.4 billion, a decrease of one percent from the same period a year ago. The results fell short of Wall Street expectations. Four analysts surveyed by Zacks Investment Research expected $5.61 billion in revenues. Results were significantly impacted by stronger foreign currencies relative to the U.S. dollar compared to the prior year period.
In the U.S. and Europe, revenue fell four percent and 3.9 percent respectively. Third-quarter revenue also fell percent on a constant-currency basis in the company’s Northern Europe segment, which includes the U.K., Germany, the Netherlands and elsewhere.
The Milwaukee-based company posted earnings of $158 million, or $2.43 per diluted share, compared to $137.7 million, or $2.04 per diluted share, last year. The results exceeded Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of $2.41 per share.
“Our third quarter results reflect a more challenging economic environment than we had anticipated, in particular for some countries in Europe,” said Jonas Prising, chairman and CEO. “While we are cautious on our outlook, we are confident in our ability to manage in a more uncertain environment. We believe our market leading global footprint and diversified business mix, enabled by technology, will continue to serve us well as access to human capital and workforce agility remains a strategic priority for employers globally.”
During the quarter, ManpowerGroup said that its board of directors has authorized a new share repurchase program under which the company may repurchase up to 6 million shares of its common stock. The new repurchase program is in addition to the share repurchase program authorized in 2016, of which about 1.8 million shares remained available for repurchase as of June 30. Purchases under the new share repurchase program may be made from time to time through open market purchases, block transactions, privately negotiated transactions or other facilities.
In August, ManpowerGroup announced that Darryl Green decided to retire as president and chief operating officer, effective Aug. 31, because of family health issues. Mr. Green has been with the company since 2007 and has been a member of the executive leadership team for the past 11 years. The company did not name a successor.
“Darryl is an exceptional leader in many ways. He has always delivered strong business results in all the roles he has held and leaves us with a legacy of improved commercial processes, operational excellence and the focus on continuous improvement,” said Mr. Prising. “We have benefitted from his outstanding business acumen and experience and the foundations he has helped create for our accelerated performance and progress.”
Right Management, the global career and talent development expert within ManpowerGroup, has launched a new executive transition offering in the U.S. The “E•Series Executive Transition Services” draws on the workforce and assessment expertise of ManpowerGroup and the leadership development of Right Management to bring comprehensive transition support to executives.
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“Organizations in all industries are experiencing disruption from digital transformation to public policy changes and shifting demographics,” said Ian Symes, EVP of Right Management Europe & North America. “In times of change, leader turnover rises. Since 2017, we’ve seen close to a 10 percent increase in leaders moving on. In the digital age leaders need to lead differently to capture opportunity and stay relevant. Helping those whose skills no longer fit transition smoothly to new positions outside the organization is not only the right thing to do; it’s critical to mitigating risk and protecting your employer brand.”
Recently, ManpowerGroup also named Stefano Scabbio as president of Northern Europe, Mediterranean and Eastern Europe. “Stefano has been instrumental in accelerating growth and driving next generation innovation across our European business,” said Mr. Green. “Under his leadership, Stefano is enhancing and modernizing the experience for our candidates and clients, with speed, in a rapidly evolving digital market.”
“We are anticipating the fourth quarter of 2018 diluted net earnings per share to be in the range of $2.15 to $2.23, which includes an estimated unfavorable currency impact of five cents,” Mr. Prising said. “This includes an estimated one-time negative impact of 27 cents related to reduced gross profit in France.” ManpowerGroup noted that it expects a challenging environment in Europe for the fourth quarter.
Manpower shares have decreased 38 percent since the beginning of the year. The stock has fallen 36 percent in the last 12 months. The company had a market cap of $4.85 billion.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media