Second-quarter revenue fell at ManpowerGroup Inc. (NYSE: MAN), and the company reported it expects some easing of demand — but not a dramatic drop — going into the third quarter. The world’s third-largest staffing firm also reported a reorganization charge of $18.7 million and legal settlement costs of $10.0 million — both in the second quarter.

“The second quarter underscored our ability to execute well in a difficult environment,” said Chairman and CEO Jeffrey Joerres. “It was a quarter in which we experienced mild but steady declines in revenue throughout the quarter. Europe, which comprises 65 percent of our business, not surprisingly experienced the most decline in the quarter”

Joerres added that the company’s solutions business generated strong revenue. The CEO also reported the company booked 34 additional recruitment process outsourcing deals in the second quarter, up from a run rate in the mid-20s in previous quarters.

ManpowerGroup posted second-quarter revenue of $5.21 billion, down 8.1 percent from revenue of $5.67 billion in the second quarter of last year. However, the decline was only 0.8 percent in constant currency.

By geography:

• U.S. revenue fell 3.6 percent year-over-year to $763.2 million, but revenue rose in the company’s “other Americas division” by 2.6 percent to $389.2 million. The increase in other Americas was 12.0 percent in constant currency.
• Second-quarter revenue in Southern Europe fell 13.3 percent to $1.89 billion, a constant-currency decline of 2.7 percent.
• Southern Europe includes France, where revenue fell 13.2 percent (down 2.5 percent in constant currency) to $1.43 billion.
• Revenue in Northern Europe fell 9.6 percent to $1.42 billion, a decline of 1.2 percent in constant currency.
• Asia Pacific revenue was roughly flat at $662.9 million in the second quarter compared with the same period last year. On a constant currency basis, it was up 1.8 percent.
• Second-quarter revenue at Right Management, which provides outplacement services, fell 0.9 percent to $83.9 million, but was up 2.9 percent in constant currency.

ManpowerGroup’s second-quarter gross margin narrowed to 16.6 percent from 17.0 percent in the year-ago quarter.

CFO Mike Van Handel said in a conference call with analysts that gross margin was below expectations because of lower permanent recruitment revenue and lower temporary recruitment gross margin in some European countries.

“Permanent recruitment fees showed good growth in the Americas albeit at a slightly lower rate than the first quarter but softened considerably in Europe with the contraction of 17 percent in Southern Europe and 8 percent in Northern Europe, both in constant currency,” Van Handel said.

ManpowerGroup posted second-quarter net income of $41.0 million, down 43.6 percent from net income of $72.7 million in the second quarter of last year. The results include a reorganization charge of $18.7 million and legal settlement costs of $10.0 million.

Van Handel said $10.4 million of the $18.7 million reorganization charge related to the final phase of reorganization at Right Management that includes realigning its management structure and combining its offices with some of ManpowerGroup’s professional business lines in certain markets.

“Also included in reorganization charges is an $8.3 million charge in the Americas of which $6.9 million relates to the U.S. Roughly half of these costs are severance costs associated with business realignment and half relate to office rents as a result of utilizing less office space in some markets and office consolidation in other markets,” Van Handel said.

“Also included in reported earnings in the U.S. is a nonrecurring legal charge of $10 million primarily related to the settlement of an alleged class-action lawsuit regarding our vacation pay policies in Illinois,” he said. “While we deny any liability in this matter, we concluded a settlement was in our best interests given the costs of ongoing litigation.”

MapowerGroup expects third-quarter revenue to be down 11 percent to 13 percent (down 3 percent to 5 percent in constant currency) from the third quarter of last year. However, this year’s third quarter includes one less billing day that last year’s third quarter.

“As we look to the third quarter, we believe we could see some further easing in demand in many in our markets but we are not forecasting a dramatic drop-off,” Van Handel said.

ManpowerGroup Inc. (NYSE: MAN)
 For the second quarter ended June 30, 2012, compared with the same period a year ago
 Revenue: $5.21 billion, -8.1 percent
 Net income: $41.0 million, -43.6 percent