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Kelly revenue edges down, but OCG up 21%

November 06 2013

Kelly Services Inc. (NASD: KELYA) reported third-quarter revenue edged down 0.6 percent year over year to $1.35 billion. Kelly’s global third-quarter gross margin narrowed to 16.4 percent from 16.8 in the same quarter last year.

 “We’re pleased that our third quarter performance surpassed our expectations despite an erratic and lackluster economy,” said President and CEO Carl Camden. “The Americas delivered a nice turnaround in fee performance and KellyOCG brought in strong revenue growth and outsized operating profits.”

Global OCG revenue in the third quarter rose 21.2 percent to $126.9 million. OCG includes contingent workforce outsourcing (managed service solutions), business process outsourcing, recruitment process outsourcing, independent contractor compliance and other services.

In the Americas, Kelly’s professional and technical staffing revenue fell 5.1 percent year over year to $248.3 million, and commercial staffing revenue fell 3.9 percent to $617.0 million.

Kelly’s third-quarter U.S. revenue fell 1.2 percent year over year to $843.5 million. Canadian revenue fell 14.5 percent to $52.9 million, but was down just 10.8 percent in constant currency. Third-quarter Mexico revenue rose 6.6 percent to $33.1 million, the increase was 4.5 percent in constant currency.

Professional technical revenue in Europe, the Middle East and Africa rose 5.1 percent in constant currency to $45.1 million in the third quarter. EMEA commercial revenue rose 1.8 percent in constant currency to $224.5 million.

Third-quarter Asia-Pacific professional and technical revenue fell 30.6 percent in constant currency to $9.1 million. Asia-Pacific commercial revenue rose 8.6 percent in constant currency to $87.6 million.

Global third-quarter net earnings rose 13.3 percent to $18.8 million from $16.6 million in last year’s third quarter. The company posted a restructuring charge of $500,000 in the third quarter of this year.

Kelly Services Inc. (NASD: KELYA)
For the third quarter ended Sept. 29, 2013, compared with the same period in the previous year.
Revenue: $1.35 billion, -0.6 percent
Net income: $18.8 million, +13.3 percent


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