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Kelly's third-quarter revenue falls

October 21, 2008

Kelly Services Inc.'s (NASD: KELYA) third-quarter revenue fell 1.9% to almost $1.40 billion.

The Troy MI-based professional and commercial staffing company also posted a net loss of $12.2 million compared with net income of $15.1 million in the third quarter of last year. Kelly said the most-recent quarter included a $22.5 million charge related to several legal matters.

Gross margin, however, improved to 17.6% from 17.3%.

"Our third quarter performance reflects the rapid deterioration in global economic conditions and further weakening of the staffing market, particularly in the U.S.," said President and CEO Carl Camden. "Absent the litigation charge, we would have reported modest earnings for the quarter."

Kelly reported third-quarter U.S. revenue of $795.8 million, down 6.9% from $854.6 million in the third quarter of 2007.

The company's Americas commercial staffing division posted a 9.4% decline in third-quarter revenue to $618.3 million. Its Americas professional and technical staffing division third-quarter revenue fell 3.1% to $228.2 million. Kelly's Americas operations include the U.S., Canada, Puerto Rico and Mexico.

Separately, Kelly announced today a joint effort with IBM to provide recruitment process outsourcing services aimed at multinational companies.

"To date, no single provider has been able to offer a globally integrated, end-to-end solution for RPO," said Candy Lewandowski, VP of Kelly OCG. "In the past, solutions have been regional at best. That changes today.

Kelly Services Inc. (NASD: KELYA)
For the third quarter ended Sept. 28, 2008, compared with the same period in 2007.
Revenue: $1.40 billion, -1.9%
Net loss: $12.2 million vs. net income of $15.1 million