Employment services provider Manpower Inc. (MAN) Wednesday reported a wider loss for the third quarter, reflecting a loss on sale of an equity investment and goodwill impairment charge, with 26% decline in revenues. Manpower shares are currently trading down nearly 10% on the New York Stock Exchange.
For the quarter, the Milwaukee, Wisconsin-based company's net loss was $50.4 million or $0.64 per share compared to a loss of $43.2 million or $0.55 per share in the year-ago period.
On an average, 15 analysts polled by Thomson Reuters expected the company to earn $0.17 per share for the quarter. Analysts' estimates typically exclude special items.
Manpower said the recent quarter results include a loss on sale of an equity investment and a goodwill impairment charge totaling to $71.3 million or $0.84 per share, and a charge of $7.5 million or $0.06 per share with regard to repayment of the company's revolver borrowings and extinguishment of an interest rate swap deal in October. The company said net earnings, excluding charges, would have been $20.5 million or $0.26 per share.
Revenues from services for the quarter plummeted to $4.19 billion from $5.67 billion in the third quarter of fiscal 2008. Analysts expected the company to generate revenues of $3.95 billion during the quarter.
Manpower stated that revenues from services include fees received from its franchise offices totaling $5.7 million. Fees were primarily based on revenues generated by franchise offices, which were $200.3 million for the quarter, the company noted.
On a segmental basis, service revenues from Americas were $653.3 million, as against $812.8 million a year ago, service revenues from France dropped to $1.31 billion from $1.89 billion last year, and EMEA segment generated service revenues of $1.61 billion, versus $2.33 billion a year ago.
Service revenues from Asia Pacific fell to $427.9 million from $453.6 million last year, and Jefferson Wells generated service revenues of $48.3 million, compared to $74.2 million in 2008. However, service revenues from Right Management segment increased to $135.7 million from $108.3 million last year.
During the quarter, goodwill and intangible asset impairment charges incurred by Manpower amounted to $61.0 million, as against $163.1 million in the same quarter last year. The company said goodwill impairment charges for the quarter relates to its investment in Jefferson Wells. Selling and administrative expenses for the three-month period slumped to $725.6 million from $1.01 billion in 2008.
Commenting on the results, Chairman and chief executive officer Jeffrey Joerres said, "We continued to experience sluggish demand for our services as the labor markets throughout the world were hampered by lack of demand for companies' products and services."
The company added that its quarterly results had an unfavorable impact of $0.02 per share as foreign currencies were relatively weaker compared to the previous-year period.
"All of our major operations contributed to our better than expected profitability as revenue across the board was marginally stronger, however, the uptick in revenue is muted at this time compared to previous recoveries," Joerres added.
For the nine-month period, the company posted a net loss of $28.8 million or $0.37 per share, as against a profit of $139.7 million or $1.75 per share in the comparable period prior year. Revenues from services for the year-to-date period plunged to $11.64 billion from $16.96 billion in the previous year.
For the second quarter of fiscal 2009, Manpower had reported a net income of $19.3 million or $0.25 per share, as against $107.4 million or $1.34 per share in the same quarter a year ago. Revenues for the second quarter had plummeted to $3.80 billion from $5.90 billion in the 2008-year period.
Looking ahead, the company expects its fourth-quarter earnings to be between $0.17 and $0.27 per share, including an anticipated positive currency impact of $0.03. Analysts foresee the company to earn $0.28 per share for the fourth quarter.
MAN is currently trading at $54.71 per share, down 9.94%, on the New York Stock Exchange.
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