July 31, 2017 – Robert Half International Inc./ (NYSE:RHI) posted second quarter revenues of $1.31 billion, a 2.7 percent decrease from revenues of $1.34 billion during the same quarter last year. This matched Wall Street expectations.
The Menlo Park, CA-based recruiting company recorded a second quarter profit of $80 million, or 64 cents per share, compared to earnings of $92 million, or 71 cents per share, last year. The results fell short of Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 65 cents per share.
- Global Staffing Division: Global Staffing revenues declined three percent year over year. While international revenues increased 2.1 percent, U.S. revenues fell 4.3 percent from the prior-year quarter. Currency had a positive impact of .7 percent during the quarter. On a constant currency basis, global staffing declined 1.3 percent.
- Protiviti: Protiviti revenues declined .6 percent, mainly because of a six percent decrease in international revenues. However, U.S. revenues improved .6 percent. Gross margin for the segment fell 26.7 percent. Currency had a positive impact of .7 percent during the quarter. On a constant currency basis, Protiviti revenues rose 1.1 percent. The company has been witnessing declining operating margins in this segment since the beginning of 2016.
“Second quarter revenues for the company were strongest internationally, but we also were pleased with the quarter-over-quarter, sequential performance of our domestic staffing operations,” said Harold M. Messmer Jr., chairman and CEO of Robert Half. “Every U.S. staffing line of business reported higher sequential revenue growth this year than the same period a year ago.” Mr. Messmer added that the company’s return on invested capital in the second quarter was 29 percent.
Guidance for Q3
Robert Half issued its earnings and sales guidance for the third quarter of 2017. The company expects revenues in the range of $1.305 to $1.365 billion for the quarter. In addition, it projects earnings in the range of 66 to 72 cents per share. The Zacks Consensus Estimate for the third quarter is pegged at 72 cents, which is at the higher end of the estimated range.
The management stated that it would continue to invest in technology innovations. The company also expects hiring activity in the U.S. to improve in the forthcoming periods, backed by GDP growth.
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In the second quarter, Robert Half bought back one million shares for $47 million. There are approximately 4.2 million shares available for buyback under the stock repurchase program.
Robert Half shares have fallen two percent since the beginning of the year, while the Standard & Poor’s 500 index has increased 11 percent. In the final minutes upon release of its Q2 numbers, shares hit $47.80, an increase of 17 percent in the last 12 months.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media