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World – Kelly Q1 revenue up despite weak European market

May 10 2012

First-quarter results at staffing company Kelly-Services (KELYA:NSQ) beat market expectations as weaker performance across Europe and Asia was offset by sustained demand in North America.

“We are pleased to report solid quarterly performance in spite of the economic challenges that continue to test the sustainability of this recovery. By staying focused on our strategy, we were able to leverage a leaner cost structure, improve our gross profit rate, and increase earnings,” said Carl. T Camden, President and CEO at the company.

Total Group revenue was up by +1.2% in the first quarter to US$1.35 billion from US$1.33 billion a year ago. Gross profit increased to US$223.7 million from US$211.2 million, a rise of +5.9%. Operating profit, or earnings from operations, amounted to US$14.7 million, compared to US$1.6 million in the first quarter of 2011. Net income was also up, reaching US$9.6 million from US$1.1 million a year ago.

In the first quarter 2012, revenue across the EMEA region declined by -5.5% to US$263.0 million, compared to US$278.3 million in the first quarter 2011. Particularly France, the UK and Portugal posted lower revenue while Switzerland, Italy and Norway saw turnover rise.

In France, revenue fell by -10.3% to US$62.8 million from US$70.0 million. The UK also saw revenue decrease by -10.9%, reaching US$27.7 million, down from US$31.1 million a year ago. Portugal revenue dropped -11.8% to US$18.2 million, compared to US$20.6 million a year ago while Germany also posted a loss in revenue of -7.9%. There sales fell to US$18.7 million in the first quarter, down from US$20.3 million a year ago.

However, revenue was up in Switzerland by +13.4%, reaching US$53.6 million in the first quarter compared to US$47.2 million at the same time last year. In Russia sales were down to US$33.6 million, compared to US$34.2 million a year ago but in constant currency this increased by +1.3%. Norway revenue rose by +8.8%, reaching US$16.5 million, up from US$15.1 million in Q1 2011. Other countries in the EMEA region did not perform well as revenue fell to US$15.6 million in the first quarter 2012 from US$23.2 million 2011 in Q1 2011, a reduction of -5.5%.

In the APAC region – which includes Australia, Singapore, Malaysia, New Zealand and India – revenue declined by -8.7% to US$104.4 million in the first quarter from US$114.5 million a year ago. Especially in India revenue dropped by over -46% to US$9.5 million while Australia posted a revenue loss of -7.1%. However, New Zealand saw sales increase by +15%. 

But the weakness in the European and Asia-Pacific market was counteracted by stronger performance in the Americas, where revenue jumped +4.3% to US$987.4 million from US$946.3 million a year ago. The US, the firm’s largest market in the region, increased revenue by +2.2% to US$858.5 million.

Kelly Services assigns professional and technical employees in sectors such as finance, education, engineering, information technology, law, healthcare and home care. Apart from offering staffing opportunities, the firm also provides talent management solutions for its customers, including outsourcing, consulting, recruitment, career transition and vendor management services.

After publishing its first-quarter results yesterday, the firm’s share price jumped +4.6% at the New York Stock Exchange to US$13.67, down -30.2% from a year ago but +29.9% above the 52-week low of US$10.77 set on 4 October 2011. This values the company at US$506.37 million.


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