Manpower (MAN) Down 1.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for ManpowerGroup (MAN). Shares have lost about 1.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Manpower due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
ManpowerGroup Beats on Q4 Earnings
ManpowerGroup Inc. reported impressive fourth-quarter 2023 results, with earnings and revenues both beat the Zacks Consensus Estimate.
Quarterly adjusted earnings of $1.45 per share surpassed the consensus mark by 19.8%. The bottom line, however, declined 30.3% year over year, mainly due to restructuring costs and Argentina-related non-cash currency translation losses. Revenues of $4.63 billion surpassed the consensus mark by 1.5% and dipped 3.7% year over year on a reported basis. Revenues fell 5% on a constant-currency (cc) basis.
Segmental Revenues
Revenues from America of $1.07 billion came in line with our expectations but tumbled 9.1% year over year on a reported basis and 4.5% at cc. In the United States, revenues reached $702.3 million, surpassing our estimate of $742.3 million but declining 14.3% year over year. In the Other Americas subgroup, revenues of $372.3 million lagged our projection of $354.9 million but inched up 2.7% on a reported basis and 17.7% at cc.
Revenues from Southern Europe of $2.11 billion beat our prediction of $2.03 billion and improved marginally on a reported basis. Yet, the metric fell 4.1% at cc.
Revenues from France came in at $1.21 billion, beat our suggestion of $1.18 billion. The reading was up 1.2% on a reported basis. Nonetheless, it was down 4.1% at cc.
Revenues from Italy amounted to $415.1 million, beating our forecast of $400.8 million. It improved 0.6% on a reported basis. However, the measure contracted 4.6% at cc.
The Other Southern Europe sub-segment generated revenues of $487 million, which outshined our expectations of $449.9 million. It declined 1.4% year over year on a reported basis. The reported figure was down 3.7% at cc.
Northern Europe revenues declined 6.1% on a reported basis and 10.1% at cc to $913.7 million, lagging our estimate of $923.5 million. APME revenues totaled $552.2 million compared with our anticipation of $541.5 million. The figure was down 4.5% on a reported basis and 2.7% at cc.
Operating Performance
The company registered operating loss of $39.5 million, down by more than 100% year over year on a reported basis and on current currency basis.
Key Balance Sheet & Cash Flow Figures
ManpowerGroup exited the quarter with a cash and cash equivalent balance of $581.3 million compared with the prior quarter’s $571.1 million. Long-term debt was $990.5 million compared with $948.5 million in the preceding quarter.
The company generated $113.7 million of cash from operating activities. Capital expenditures were $23.1 million. It spent $50 million on repurchasing common stock in the quarter.
Q1'24 Outlook
ManpowerGroup expects EPS in the range of $88 cents-$98 cents for the first quarter of 2024. Revenues are projected to decline 5-9% year over year on a reported basis and 4-8% at cc. Gross profit margin is anticipated to be between 17.2% and 17.4%.
The company expects EBITA margin to be between 1.7% and 1.9%. Operating profit margin is anticipated in the 1.5-1.7% band.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -14.1% due to these changes.
VGM Scores
At this time, Manpower has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Manpower has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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ManpowerGroup Inc. (MAN) : Free Stock Analysis Report
