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Kelly Q4 revenue up, but profit falls 23.8%

January 24 2008
Fourth-quarter revenue at Kelly Services Inc. (NASD: KELYA) rose 3.8%, beating analysts' estimates. Net income, however, fell 23.8% in the quarter.

"Despite continued weakness in the U.S. staffing market, we're pleased that we delivered solid profitable results," President and CEO Carl Camden said in a statement.

The company reported net income of $18.6 million compared with $24.4 million in the fourth quarter of 2006. Revenue rose to $1.48 billion from $1.42 billion in the same period last year. Gross margin improved to 18.0% from 16.8%.

Kelly's fourth-quarter earnings per share of 52 cents beat analysts' estimate of 49 cents. Its shares rose 2.56% to $17.62 in late morning trading.

Kelly's U.S. revenue fell 3.2% to $881.6 million in the fourth quarter from $910.7 million in the same period last year.

Fourth-quarter revenue in its Americas commercial staffing operations (which include the United States, Canada, Mexico, and Puerto Rico), fell 5.9% to $695.8 million. Its fourth-quarter Americas professional and technical staffing revenue rose 5.6% to $292.8 million.

The company said it completed its restructuring of its Americas commercial division at a cost of $3.0 million.

Full-year 2007 net income for the whole company fell 3.9% to $61.0 million from $63.5 million in 2006. Full-year revenue, however, rose 2.2% to $5.67 billion in 2007 from $5.55 billion in the prior year. Gross margin improved to 17.5% from 16.3%.

Kelly's full-year U.S. revenue fell 4.1% to $3.45 billion in 2007 from $3.60 billion in the prior year.

Full-year revenue in Kelly's Americas commercial staffing operations fell 5.4% to $2.76 billion. Full-year revenue in its Americas professional and technical staffing segment slipped 0.2% to $1.11 billion.

Kelly forecast first-quarter 2008 earnings of 19 cents to 23 cents per share.

Kelly Services Inc. (NASD: KELYA)
For the fourth quarter ended Dec. 30, 2007, compared with the same period in 2006.
Revenue: $1.48 billion, +3.8%
Net income: $18.6 million, -23.8%

For the 2007 fiscal year ended Dec. 30, 2007, compared with the previous year.
Revenue: $5.67 billion, +2.2%
Net income: $61.0 million, -3.9%

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