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Robert Half second-quarter revenue up 10%

July 23, 2014

Professional staffing firm Robert Half International (NYSE: RHI) reported revenue rose 9.6 percent year over year in the second quarter to $1.16 billion. Chairman and CEO Harold M. Messmer, Jr., cited improved labor markets and higher global demand for the firm’s professional staffing services for the growth.

The highest sequential and year-over-year revenue growth rates were reported by the firm’s permanent placement operations and its Protiviti division, which provides consulting and internal audit services.

Robert Half Technology revenue rose 7.8 percent in the second quarter to $142.0 million. At Protiviti, revenue rose 15.5 percent to $151.0 million.

Second-quarter revenue rose 9.1 percent in the firm’s OfficeTeam segment to $226.5 million and 6.5 percent to $403.0 million in Accountemps, Robert Half’s largest division by revenue.

Second-quarter temporary and consultant staffing revenue rose 9.3 percent in the U.S. and 4.6 percent internationally. Permanent placement revenue rose 15.8 percent in the U.S. and 10.6 percent in international operations.

Second-quarter gross margin at Robert Half rose to 41.1 percent from 40.6 percent in the same quarter in the prior year.

Net income at the Menlo Park, Calif.-based firm rose 19.1 percent year over year in the quarter to $75.1 million.

Quote
“The demand for skilled talent continues to outpace the supply in many of our specialty areas, Messmer said in a conference call with investors. “Our strength is in helping companies locate and hire this hard-to-find talent. As a result, we saw greater demand for our professional staffing and recruitment services in the second quarter. This was the case among our small and midsize clients, in particular. These firms often lack an internal human resources function and turn to us for help filing their open temporary and full-time positions.”

Revenue

  Q2 2014 ($000s) Q2 2013 ($000s) % growth
Revenue $1,164,914 $1,063,228 9.6%

Revenue by segment

  Q2 2014 ($000s) Q2 2013 ($000s) % growth
Accountemps $402,996 $378,515 6.5%
OfficeTeam $226,505 $207,683 9.1%
Robert Half Technology $141,988 $131,751 7.8%
Robert Half Management Resources $139,549 $124,120 12.4%
Robert Half Finance & Accounting $102,827 $90,347 13.8%
Protiviti $151,049 $130,812 15.5%

Revenue by geography and temp/perm

    Year-over-year revenue growth rates  
    2013 2014  
    Q1 Q2 Q3 Q4 Q1 Q2
Global                 
  Accountemps -2.3% -0.7% -0.8% -0.4% 1.7% 6.5%
  OfficeTeam 0.6% 2.4% 2.5% 3.0% 4.7% 9.1%
  Robert Half Technology 4.6% 10.2% 11.8% 14.1% 9.3% 7.8%
  Robert Half Management Resources -3.1% -1.2% -0.2% 0.7% 5.6% 12.4%
  Temporary and consulting staffing -0.8% 1.6% 1.9% 2.7% 4.1% 8.2%
  Permanent placement staffing 0.6% 1.4% 7.9% 6.6% 11.1% 13.8%
Global total   -0.6% 1.6% 2.5% 3.1% 4.8% 8.7%
               
United States              
  Temporary and consulting staffing 2.9% 4.0% 4.5% 5.0% 5.9% 9.3%
  Permanent placement staffing 14.9% 10.3% 13.8% 11.0% 12.6% 15.8%
U.S. total   3.7% 4.5% 5.2% 5.4% 6.4% 9.8%
               
International              
  Temporary and consulting staffing -10.7% -5.8% -5.9% -4.2% -1.2% 4.6%
  Permanent placement staffing -16.6% -10.8% -0.8% 0.0% 8.6% 10.6%
International total   -11.6% -6.5% -5.2% -3.6% 0.1% 5.4%

 Gross margin

  Q2 2014  Q2 2013 
Gross margin 41.1% 40.6%

 Net income

  Q2 2014 ($000s) Q2 2013 ($000s) % growth
Net income $75,140 $63,089 19.1%

Guidance
Robert Half, the 6th largest staffing firm in the U.S. and 9th globally, expects third-quarter revenue of between $1.175 billion and $1.225 billion.

Share price and market cap

Shares in Robert Half rose 7.46 percent Wednesday to close at $51.79. Robert Half has a market cap of approximately $7.02 billion, according to Yahoo! Further, The Street reports shares reached an all-time high Wednesday.