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Manpower (MAN) Up 4.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for ManpowerGroup (MAN - Free Report) . Shares have added about 4.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Manpower due for a pullback? 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 catalysts.
ManpowerGroup Misses Q2 Earnings Estimate
ManpowerGroup reported mixed second-quarter 2020 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Quarterly-adjusted earnings of 18 cents per share beat the consensus mark by 38.5% but declined more than 100% year over year. Revenues of $3.74 billion missed the consensus mark by 1.5% and declined 30.4% year over year on a reported basis and 28% on a constant-currency basis. Declines in both top and bottom lines reflect impact of the coronavirus-related reduction in hiring activity.
Segmental Revenues
Revenues from America totaled $836.6 million, down 21.7% year over year on a reported basis and 16.7% on a constant-currency basis. In the United States, revenues came in at $515.9 million, down 21%, both on reported and constant-currency basis. In the Other Americas subgroup, revenues of $320.7 million decreased 22.8% on a reported basis and 10% on a constant-currency basis. Americas contributed 23% of total revenues.
Revenues from Southern Europe were down 38.6% on a reported basis and 7.7% on a constant-currency basis to $1.5 billion. Revenues from France came in at $76 billion, down 48.4% on a reported basis and 47.5% on a constant-currency basis. Revenues from Italy were $268.5 million, down 31.9% on a reported basis and 30.7% on a constant-currency basis. The Other Southern Europe subsegment generated revenues of $466.3 million, down 18.9% on a reported basis and 18.2% on a constant-currency basis. Southern Europe contributed 39% of total revenues.
Northern Europerevenues slid 27.5% on a reported basis and 24.2% on a constant-currency basis to $865.7 billion. The segment accounted for 23% of total revenues in the quarter.
APME revenues totaled $569.1 million, down 27.5% on a reported basis and 24.2% on a constant-currency basis. The segment contributed 15% of total revenues.
Operating Performance
Gross profit in the quarter was $576.7 million, down 33.8% year over year on a reported basis and 31.9% on a constant-currency basis. Gross profit margin came in at 15.7%, down 30 basis points (bps) year over year.
The company incurred operating loss of $50 million in the quarter against operating profit of $130.8 million in the year ago quarter.
Balance Sheet and Cash Flow
ManpowerGroup exited the second quarter with cash and cash equivalents balance of $1.4 billion compared with the prior quarter’s $1.1 billion. Long-term debt at the end of the quarter was $1.01 billion, compared with the $995.6 million witnessed in the preceding quarter.
The company generated $415.1 million of cash from operating activities, and Capex was $9.8 million in the quarter. It paid dividends of $63.8 million in the quarter.
Q3 Guidance
The company expects revenues to be down 18% to 20% on a constant-currency basis. Earnings per share is anticipated to be in the range of 59 cents to 67 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.02% due to these changes.
VGM Scores
At this time, Manpower has a great Growth Score of A, though it is lagging a lot 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 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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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Manpower (MAN) Up 4.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for ManpowerGroup (MAN - Free Report) . Shares have added about 4.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Manpower due for a pullback? 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 catalysts.
ManpowerGroup Misses Q2 Earnings Estimate
ManpowerGroup reported mixed second-quarter 2020 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Quarterly-adjusted earnings of 18 cents per share beat the consensus mark by 38.5% but declined more than 100% year over year. Revenues of $3.74 billion missed the consensus mark by 1.5% and declined 30.4% year over year on a reported basis and 28% on a constant-currency basis. Declines in both top and bottom lines reflect impact of the coronavirus-related reduction in hiring activity.
Segmental Revenues
Revenues from America totaled $836.6 million, down 21.7% year over year on a reported basis and 16.7% on a constant-currency basis. In the United States, revenues came in at $515.9 million, down 21%, both on reported and constant-currency basis. In the Other Americas subgroup, revenues of $320.7 million decreased 22.8% on a reported basis and 10% on a constant-currency basis. Americas contributed 23% of total revenues.
Revenues from Southern Europe were down 38.6% on a reported basis and 7.7% on a constant-currency basis to $1.5 billion. Revenues from France came in at $76 billion, down 48.4% on a reported basis and 47.5% on a constant-currency basis. Revenues from Italy were $268.5 million, down 31.9% on a reported basis and 30.7% on a constant-currency basis. The Other Southern Europe subsegment generated revenues of $466.3 million, down 18.9% on a reported basis and 18.2% on a constant-currency basis. Southern Europe contributed 39% of total revenues.
Northern Europe revenues slid 27.5% on a reported basis and 24.2% on a constant-currency basis to $865.7 billion. The segment accounted for 23% of total revenues in the quarter.
APME revenues totaled $569.1 million, down 27.5% on a reported basis and 24.2% on a constant-currency basis. The segment contributed 15% of total revenues.
Operating Performance
Gross profit in the quarter was $576.7 million, down 33.8% year over year on a reported basis and 31.9% on a constant-currency basis. Gross profit margin came in at 15.7%, down 30 basis points (bps) year over year.
The company incurred operating loss of $50 million in the quarter against operating profit of $130.8 million in the year ago quarter.
Balance Sheet and Cash Flow
ManpowerGroup exited the second quarter with cash and cash equivalents balance of $1.4 billion compared with the prior quarter’s $1.1 billion. Long-term debt at the end of the quarter was $1.01 billion, compared with the $995.6 million witnessed in the preceding quarter.
The company generated $415.1 million of cash from operating activities, and Capex was $9.8 million in the quarter. It paid dividends of $63.8 million in the quarter.
Q3 Guidance
The company expects revenues to be down 18% to 20% on a constant-currency basis. Earnings per share is anticipated to be in the range of 59 cents to 67 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.02% due to these changes.
VGM Scores
At this time, Manpower has a great Growth Score of A, though it is lagging a lot 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 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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.