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View All NewsASGN fourth-quarter revenue up 10%, but gross margin narrows
Fourth-quarter revenue rose 10.3% at ASGN Inc. (NYSE: ASGN) amid growth in its Oxford and ECS divisions. Revenue at the Calabasas, California-headquartered staffing provider was up 10.4% on a same billable day and constant currency basis. However, gross margin narrowed.
| (US$ millions) | Q4 2019 | Q4 2018 | % change |
| Revenue | $1,025.2 | $929.7 | 10.3% |
| Gross profit | $289.5 | $272.0 | 6.4% |
| Gross margin | 28.2% | 29.3% | |
| Net income | $39.3 | $45.9 | -14.4% |
Fourth-quarter gross margin narrowed as ASGN’s Apex Systems and the ECS government division posted faster growth than the company’s higher-margin operations. Another factor was a year-over-year decline in permanent placement revenue.
Revenue by segment
| (US$ millions) | Q4 2019 | Q4 2018 | % change |
| Apex | |||
| Assignment | $628.6 | $590.7 | 6.4% |
| Permanent placement | $12.7 | $13.9 | -8.6% |
| Apex total | $641.3 | $604.6 | 6.1% |
| Oxford | |||
| Assignment | $131.6 | $129.9 | 1.3% |
| Permanent placement | $18.8 | $21.3 | -11.7% |
| Oxford total | $150.4 | $151.2 | -0.5% |
| ECS total | $233.5 | $173.9 | 34.3% |
Acquisitions of DHA Group Inc. in the first quarter and Intersys in the third quarter boosted revenue. DHA is part of ASGN’s government division, ECS, while Intersys is included in the company’s Apex Systems division.
Meanwhile, net income in the fourth quarter included a write-off of deferred loan costs of $18.9 million related to the restructuring of the company’s senior credit facility in November, the company reported. Excluding this, fourth-quarter net income was $53.2 million.
Full-year results
| (US$ millions) | 2019 | 2018 | % change |
| Revenue | $3,923.9 | $3,399.8 | 15.4% |
| Gross profit | $1,130.0 | $1,023.7 | 10.4% |
| Gross margin | 28.8% | 30.1% | |
| Net income | $174.7 | $157.7 | 10.8% |
Guidance
ASGN forecast first-quarter revenue of between $990.0 million and $1.00 billion. It expects gross margin to be between 28.1% and 28.4%.
Share price and market cap
Shares in ASGN were down 5.04% to $65.01 as of 12:33 p.m. Eastern time; the company had a market cap of $3.61 billion, according to FT.com.