I bought this stock just before earnings on April 19th. The stock went up after earnings to almost $48 a share. Since earnings the stock has been falling. Since earnings were good why has the stock been falling lately?
Look at how weak profitability was for their France unit. That unit is suppose to carry their European operations however profitability was lackluster. As the CEO has stated that the market there has become very competitive.
I'll also like to see how their organic growth is doing over in the APEC. As stated by the CEO, "Included in the revenue growth, was second quarter 2011 acquisitions in China and India which add about 7% to our growth rate." I actually like to see how they perform going forward minus the acquisitions in terms of profitability.
They've tried to re brand their image to try to consolidate their operations however as Experis in America has shown that their revenue numbers leave a bit to be desired as it is still in decline.
Australia for example had only a 2% constant currency growth rate. I'm not sure if it takes into account their $400 military re-win contract but employment has become a bit lackluster especially in NSW with the last report of only 500 jobs created. So as such expense control along with adequate shifts in their work force is needed. I've mention this a couple of months ago that they have had uneven revenue growth from quarter to quarter.
Going forward you'll have to question the validity of a Manpower in the marketplace with so many mid-tier groups in the marketplace now which not only adds to pricing pressure but potentially lower revenue growth. The end result is a Manpower that will have to watch its bean count to remain profitable.