Research Desk Line-up: On Assignment Post Earnings Coverage
LONDON, UK / ACCESSWIRE / October 27, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on ManpowerGroup Inc. (NYSE: MAN), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=MAN, following the Company's posting of its third quarter fiscal 2017 operating results on October 19, 2017. The staffing Company outperformed top- and bottom-line expectations and provided outlook for the upcoming quarter. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
Get more of our free earnings reports coverage from other constituents of the Staffing & Outsourcing Services industry. Pro-TD has currently selected On Assignment, Inc. (NYSE: ASGN) for due-diligence and potential coverage as the Company reported on October 25, 2017, its financial results for Q3 2017 which ended on September 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on On Assignment when we publish it.
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For the three months ended September 30, 2017, ManpowerGroup reported revenues of $5.46 billion, reflecting an increase of 7.4% from Q3 2016 revenue of $5.09 billion The Company's revenue topped analysts' expectations of $5.39 billion.
During Q3 2017, ManpowerGroup's gross margin came in at 16.5%, a 40-basis point decrease from the prior year. The Company's operating profit in the reported quarter was $227.9 million, up 7.9% on a y-o-y basis. ManpowerGroup's operating profit margin came in at 4.2%, representing an increase of 10 basis points over the prior year's same quarter. ManpowerGroup stated that Q3 2016 results included approximately $8 million of non-recurring gains. Excluding those gains from the prior year's same quarter, the Company's operating profit grew more than 12% with a 20-basis point expansion in margin.
ManpowerGroup reported net earnings per diluted share of $2.04 for Q3 2017 compared to $1.87 in Q3 2016. The Company's net earnings in the reported quarter were $137.7 million compared to $129.2 million a year earlier.
ManpowerGroup's Segment Results
During Q3 2017, the Americas segment, which was comprised of 20% of consolidated revenue in the reported quarter, fell 4.1% to $1.06 billion. The segment's Operating Unit Profit (OUP) came in at $60 million in the reported quarter, representing an increase of 8% in constant currency, driven by improvement in the US, while OUP margin improved 60 basis points year-over-year.
For Q3 2017, the Southern Europe division contributed 42% of consolidated revenue in the reported quarter. Revenue in Southern Europe advanced 12% to $2.23 billion. On an average billing days basis, this represented a revenue growth rate of 14%, equal to the growth rate in Q2 2017. In the reported quarter, the segment's OUP was $117 million, representing an increase of 11% on a y-o-y basis, and OUP margin was 5.1%, flat compared to the prior year.
The Northern Europe segment was comprised of 25% of consolidated revenue in Q3 2017 and grew 5.2% to $1.37 billion. On a billing-days adjusted organic constant currency basis, Northern Europe had a 3% constant currency growth rate, which represented a deceleration from the 5% organic constant currency growth in Q2 2017. The segment's OUP came in at $49 million in the reported quarter.
During Q3 2017, the Asia/Pacific Middle-East (APME) segment generated 12% of total Company revenue. In the reported quarter, the segment's revenue grew 2.2% to $665 million. The segment's permanent recruitment growth was 9% in constant currency, while OUP was $27 million in the reported quarter, representing an increase of 9% in constant currency, and OUP margin increased 20 basis points at 4.1%.
During Q3 2017, the Right Management business' revenues were down 18.8% to $51.6 million. The segment's OUP decreased 8% to $8 million on a constant currency basis and OUP margin was 15.7%, representing an increase of 180 basis points.
ManpowerGroup's free cash flow was $247 million for the first 9 months of the year compared to $360 million in the prior year's same period. The y-o-y change reflected the Company's business strong growth during 2017. The Company recorded positive free cash flow of $125 million in the reported quarter, which compared to $129 million in the year-ago corresponding period. At the end of Q3 2017, ManpowerGroup's day sales outstanding increased over the prior year level by 2 days, which was impacted by the timing of month-end cash collections in certain markets.
ManpowerGroup's capital expenditures represented $40 million during the first 9 months, which was down $3 million from the prior year. Cash used for acquisitions year-to-date represented $40 million.
During Q3 2017, ManpowerGroup purchased 570,000 shares of stock for $62 million, bringing total purchases for the 9-month period to 1.7 million shares for $178 million. As of September 30, 2017, the Company had 3 million shares remaining for repurchase under the 6 million share program approved in July 2016. As of September 30, 2017, ManpowerGroup had cash of $667 million and total debt of $923 million, bringing the Company's net debt to $256 million.
At the end of Q3 2017, ManpowerGroup had a EUR 350 million note outstanding with an effective interest rate of $4.5 million maturing in June of 2018 and a EUR 400 million note with an effective interest rate of 1.9% maturing in September of 2022. In addition, the Company has a revolving credit agreement for $600 million, which remain unused.
For Q4 2017, ManpowerGroup is forecasting diluted net earnings per share to be in the range of $2.01 to $2.09, which includes an estimated favorable currency impact of $0.12 per share.
The Company is expecting revenue for the upcoming quarter to grow between 5% and 7% on a constant currency basis.
On Thursday, October 26, 2017, the stock closed the trading session at $124.75, rising 1.23% from its previous closing price of $123.24. A total volume of 449.22 thousand shares have exchanged hands. ManpowerGroup's stock price skyrocketed 17.79% in the last three months, 23.54% in the past six months, and 59.12% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have soared 40.37%. The stock is trading at a PE ratio of 19.07 and has a dividend yield of 1.49%. At Thursday's closing price, the stock's net capitalization stands at $8.32 billion.
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