DOW JONES NEWSWIRES
Manpower Inc. (MAN) posted a 40% decline in fourth-quarter net
profit on a "rapid" decline in demand as the staffing agency
continues to cut costs, forecasting continued deterioration in the
labor market.
Chairman and Chief Executive Jeffrey A. Joerres said the drop in
demand, which was expected, was across most of its geographic
markets. He said Manpower, the second-largest staffing agency by
sales behind Switzerland's Adecco SA (ADEN.VX), is in a good
position to cope with the drop in demand.
Manpower reported net income of $79.2 million, or $1.01 a share,
compared with $133.1 million, or $1.63 a share, a year earlier. The
latest quarter included a per-share gain of 47 cents for a tax
refund and a 35-cent per-share restructuring charge as the stronger
dollar pared per-share earnings by 10 cents.
Revenue fell 18% to $4.59 billion, or 10% on a constant currency
basis. Although it is U.S.-based, Manpower derives two-thirds of
its revenue from Europe, with one-third from France alone.
Analysts surveyed by Thomson Reuters projected earnings,
excluding items, of 81 cents a share on revenue of $4.72
billion.
Gross margin rose to 20.8% from 18.6%.
Temporary-staffing agencies like Manpower generally feel the
effects of the recession on the work force first, as businesses
typically shed temporary workers ahead of permanent staffers. Late
last month, Manpower withdrew its fourth-quarter forecast, as
revenue fell more sharply than expected, exacerbated by the
stronger dollar.
U.S. revenue fell 5.2% as the business swung to a loss. French
operations, which have been slumping as the economic troubles
spread to Europe, saw profit rise 33%, though revenue fell 28%.
Despite tough times, Manpower is continuing to invest in its
operations. Two weeks ago, it launched Mypath.com, a Web site that
permits job seekers to contact each other and exchange ideas and
experiences, similar to Facebook Inc.'s popular social-networking
site.
Manpower's shares closed Monday's session at $27.66, down 2.8%,
and weren't active premarket. Shares are down 61% since their
52-week high in May.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com
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