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ManpowerGroup (MAN) Q1 Earnings Miss, Revenues Top Estimates

Zacks Equity Research

ManpowerGroup Inc. MAN reported mixed first-quarter 2020 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same.

Quarterly adjusted earnings of 71 cents per share missed the Zacks Consensus Estimate by 2.7% and slumped 48.9% year over year.

Revenues of $4.62 billion beat the consensus estimate by 13.4%. The figure, however, declined 8.4% year over year on a reported basis and 5.9% on a constant-currency basis. The decline reflects impact of the coronavirus-related work restrictions in the company’s largest markets.

The stock has depreciated 28% over the past year compared with the 42.5% decline of the industry it belongs to.

Let’s delve deeper into the numbers.

Segmental Revenues

Revenues from America totaled $1.01 billion, down 1.9% year over year on a reported basis but up 1.2% on a constant-currency basis. In the United States, revenues came in at $610.9 million, down 2%, both on reported and constant-currency basis. In the Other Americas subgroup, revenues of $400.1 million decreased 1.7% on a reported basis but improved 6.1% on a constant-currency basis. Americas contributed 22% to total revenues.

Revenues from Southern Europe were down 7.8% on a reported basis and 5.5% on a constant-currency basis to $1.94 billion. Revenues from France came in at $1.09 billion, down 16.2% on a reported basis and 13.7% on a constant-currency basis. Revenues from Italy were $327.7 million, down 8% on a reported basis and 5.3% on a constant-currency basis. The Other Southern Europe subsegment generated revenues of $523.2 million, up 17.2% on a reported basis and 18.3% on a constant-currency basis. Southern Europe contributed 42% to total revenues.

Northern Europe revenues slid 11% on a reported basis and 7.9% on a constant-currency basis to $1.07 billion. The segment accounted for 23% of total revenues in the quarter.

APME revenues totaled $594.9 million, down 15.7% on a reported basis and 14% on a constant-currency basis. The segment contributed 13% to total revenues.

Operating Performance

Gross profit in the quarter was $724 million, down 10% year over year on a reported basis and 7.7% on a constant-currency basis. Gross profit margin came in at 15.7%, down 30 basis points (bps) year over year.

Operating profit of $37.7 million plummeted 64.2% year over year on a reported basis and 62.7% on a constant-currency basis. Operating profit margin came in at 0.8%, down 127 bps year over year.

Balance Sheet and Cash Flow

ManpowerGroup exited the first quarter with cash and cash equivalents balance of $1.1 billion compared with the prior quarter’s $1.03 billion. Long-term debt at the end of the quarter was $995.6 million compared with the $1.01 billion witnessed in the preceding quarter.

The company generated $181 million of cash from operating activities, and Capex was $9.1 million in the quarter. ManpowerGroup repurchased $63.8 million of common stock in the quarter.

ManpowerGroup currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

Robert Half International Inc. RHI reported first-quarter 2020 earnings of 79 cents per share that missed the Zacks Consensus Estimate by 2.5% and were down 15% year over year. Revenues of $1.51 billion marginally beat the consensus mark and increased 3% year over year on a reported basis and 2% on an as-adjusted basis.

Equifax Inc. EFX came up with first-quarter 2020 adjusted earnings of $1.40 per share that beat the consensus estimate by 8.5% and improved 16% on a year-over-year basis. Revenues of $957.9 million outpaced the consensus estimate by 4.2% and improved 13% year over year on a reported basis.

The Interpublic Group of Companies, Inc. IPG delivered first-quarter 2020 adjusted earnings of 11 cents per share beating the consensus mark by 22.2% and being flat year over year. Net revenues of $1.97 billion beat the consensus estimate by 1.6% but decreased 16.5% on a year-over-year basis.

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