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MPS revenue slides, foreign exchange hurts

February 05 2009

MPS Group Inc. (NYSE: MPS) said fourth-quarter revenue fell 14.5% from the year-ago quarter, but slipped only 7% excluding the effects of foreign exchange rates. Revenue declined in all the company's operating segments. MPS also posted a net loss of $293.0 million, and took a noncash impairment charge of $303 million.

"Our focus on high-demand professional specialties has fueled our growth in recent years," said CEO Timothy Payne. "However, it has become clear that even this market segment is not going to be immune to the effect of poor economic conditions. The company has seen a continuing decrease in demand for both permanent and temporary professionals in the fourth quarter."

Fourth-quarter revenue at the Jacksonville FL-based professional staffing firm was $487.5 million, compared with $570.0 million in the same period in the previous year.

MPS' operating segment posting the biggest decline was international professional services. Its fourth-quarter revenue slipped 26.4% to $109.8 million, but MPS said revenue would have fallen just 2% excluding the effects of foreign exchange rates. The segment includes Badenoch & Clark, which provides finance and accounting and other professional staffing services in Europe, Australia and Asia.

Fourth-quarter revenue fell 4.6% in its North American professional services segment, fell 12.0% in its North American information technology services segment and fell 18.9% in its international information technology segment.

MPS said revenue in its North American professional services segment would have fallen 9% excluding the effects of acquisitions. And international IT services revenue would have risen 1.0% excluding the effects of foreign exchange rates.

Fourth-quarter gross margin for the company edged down to 28.6% from 29.5%.

The fourth-quarter net loss of $293.0 million compared with net income of $23.6 million in the year-ago quarter. The company said it took a goodwill impairment charge of $303.0 million net of taxes.

Full-year 2008 revenue rose 2.3% to $2.22 billion, and full-year gross margin was unchanged at 28.7%.

Net loss for the full year was $236.0 million, compared with net income of $87.1 million in 2007.

MPS estimated first-quarter revenue of between $410 million and $450 million — a decrease of 20.7% to 27.8% from the first quarter of 2008.

MPS Group Inc. (NYSE: MPS)
For the fourth quarter ended Dec. 31, 2008, compared with the same period in 2007.
Revenue: $487.5 million, -14.5%
Net loss: $293.0 million vs. net income of $23.6 million

For the full year ended Dec. 31, 2008, compared with the previous year.
Revenue: $2.22 billion, +2.3%
Net loss: $236.0 million vs. net income of $87.1 million

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