ManpowerGroup (MAN) Earnings Beat in Q4, Revenues Miss
Despite continued weakness and uneven global market conditions, ManpowerGroup, Inc. MAN reported better-than-expected earnings in fourth-quarter 2016, which also marks its 29th consecutive quarter of an earnings beat. The company reported adjusted earnings per share of $1.80, beating the Zacks Consensus Estimate by 10 cents. Following the results, the company’s shares have remained relatively flat to close at $95.46 on Jan 31.
GAAP earnings for the quarter were $127.4 million or $1.87 per share, compared with $123.9 million or $1.66 per share in the year-ago quarter. The outperformance was primarily driven by strong operational performance and better-than-expected expense leverage.
However, ManpowerGroup’s quarterly revenues of $4,956.1 million missed the Zacks Consensus Estimate of $4,988 million, but beat the year-ago quarter’s tally of $4,953.9 million.
For full-year 2016, revenues were $19,654.1 million compared with $19,329.9 million in 2015. The decline was primarily driven by the company’s weak performance in its Americas segment. GAAP earnings for the year were $443.7 million or $6.27 per share compared with $419.2 million or $5.40 in 2015.
Segment Performance
Revenues from the United States, comprising 64% of the Americas segment, fell 8.5% year over year to $684.7 million. This was primarily impacted by the decline in demand of the company’s services owing to continued weakness in the manufacturing business of the U.S. Moreover, the segment’s operating profit remained relatively flat at $39.1 million.
In Other Americas, revenues fell 3.5% to $378.2 million, while operating profit declined 13.6% to $14.2 million.
In France, revenues increased 4.5% year over year to $1,228.6 million, while operating profit was flat at $67 million.
In Italy, revenues declined 2.1% year over year to $305.8 million. The segment’s operating profit rose 11.1% to $21.8 million.
In Other Southern Europe, revenues grew 5% to $377.8 million. Operating profit went up 22.1% to $13.1 million.
In Northern Europe, revenues fell 1.8% to $1,292.8 million, while operating profit soared 35.3% to $48.8 million, both on a year-over-year basis.
In APME (Asia Pacific Middle East), revenues climbed 8.7% to $629.6 million year over year. The segment’s operating profit grew 18% to $21.7 million year over year.
Also, revenues from Right Management decreased 16.5% year over year to $58.6 million. The company’s operating income from this segment increased 16.2% to $11.9 million.
Other Financial Details
ManpowerGroup ended the year with cash and cash equivalents of $598.5 million compared with $730.5 million a year ago. Long-term debt was $785.6 million compared with $810.9 million on Dec 31, 2015. Shareholders’ equity was $7,574.2 million compared with $7,517.5 million in the year-ago period. The company generated cash worth $600 million from operating activities in 2016 compared with $511.5 million in 2015.
ManpowerGroup Price, Consensus and EPS Surprise
ManpowerGroup Price, Consensus and EPS Surprise | ManpowerGroup Quote
Guidance
Despite volatile macroeconomic conditions, the company remains optimistic about its future performance on the back of its strategic initiatives.
ManpowerGroup expects first-quarter of 2017 earnings per share in the range of $1.06 to $1.14.
ManpowerGroup currently carries a Zacks Rank #3 (Hold). Some better ranked stocks include Core-Mark Holding Company, Inc. CORE, WNS (Holdings) Ltd. WNS and Houghton Mifflin Harcourt Company HMHC. Both companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Core-Mark has a long-term earnings growth expectation of 11% and is currently trading at a forward P/E of 21.43x.
Houghton Mifflin is a global provider of education solutions, delivering content, technology, services and media to students in over 150 countries worldwide. The company has a long-term earnings growth expectation of 6.50%.
WNS has a long-term earnings growth expectation of 14.50% and is currently trading at a forward P/E of 19.82x.
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