October 25, 2019 – Robert Half International Inc./(NYSE:RHI) posted third quarter revenues of $1.55 billion, up 5.9 percent from the same period a year ago. On a constant currency basis, revenue was up 5.4 percent. The results beat Wall Street expectations by 0.3 percent.
The Menlo Park, CA-based recruiting company recorded net income of $117 million, or $1.01 per share, compared to the prior year’s third quarter earnings of $115.2 million, or 95 cents per share.
“Persistent talent shortages resulted in continued strong demand for our staffing services in the third quarter, particularly in the United States,” said Harold M. Messmer, chairman and CEO of Robert Half. “Robert Half Management Resources was the standout among our staffing lines of business, and our Protiviti subsidiary also had a very strong quarter. We are pleased with the continued momentum we are seeing in our U.S. staffing and Protiviti operations,” he said.
Return on invested capital for the company was 42 percent in the third quarter, he noted.
Global Staffing Division
Global Staffing revenues of $1.25 billion increased 3.3 percent year over year on a reported basis and 3.4 percent on an adjusted basis. U.S. staffing revenues of $973 million increased 5.8 percent on a reported basis and 4.5 percent on an adjusted basis.
Robert Half currently operates 325 staffing locations worldwide, with 86 locations situated in 17 countries outside the U.S.
Protiviti revenues were $299 million, which rose 18.3 percent year over year on a reported basis and 14.6 percent on an adjusted basis, with strength across the U.S. and non-U.S. regions. Protiviti revenues from the U.S. grew 17.5 percent on a reported basis and 16.2 percent on an adjusted basis. The same from international regions rose 21.2 percent on a reported basis and 9.3 percent on an adjusted basis.
Protiviti recently launched a cyber-risk quantification as a service offering in alliance with RiskLens, a provider of quantitative cyber risk management software. Through quantitative risk analysis using hard data, the offering enables CIOs and CISOs to answer their board of directors’ questions about the effectiveness of their cybersecurity program with confidence, make better decisions about budgets and technology investments, and assist in meeting regulatory requirements.
Recruiting Sector Jumps 13.9 Percent
A constricting labor market with low unemployment means companies are struggling to find qualified talent. When the right people are found, the costs associated with hiring them are rising, making a lengthy onboarding process now the rule, not the exception.
In the quarter, Robert Half bought back around 1.5 million shares for $80 million. The company has 3.4 million shares available for repurchase under its existing repurchase plan as approved by the board of directors. It paid out $36 million in dividends.
Robert Half recently elected Julia Coronado to its board of directors. Ms. Coronado is president and founder of MacroPolicy Perspectives, which provides economic research on monetary policy and global macroeconomic developments. A noted financial market commentator and labor expert, she previously served as chief economist for Graham Capital Management, chief economist for North America at BNP Paribas and senior U.S. economist at Barclays Capital in New York.
Robert Half expects earnings for the fourth quarter between 94 cents and $1 per share, lower than the current Zacks Consensus Estimate of $1.02. Revenues are expected between $1.5 billion and $1.565 billion, the midpoint of which is lower than the current Zacks Consensus Estimate of $1.55 billion. The midpoints of these projections indicate year-over-year revenue decline of one percent and EPS decline of four percent.
Shares of Robert Half declined 4.5 percent over the past year compared with 3.2 percent decline of the industry it belongs to, according to Zacks Equity Research.
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