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US recruiter Kelly-Services (KELYA:NSQ) reported on Wednesday that third-quarter revenue fell by -4% to US$1.4 billion as Europe continued to weigh on the company’s sales performance.
Kelly Services is the fifth-largest recruiter in the world, based on revenue. Gross profit in the period increased by +1% to US$227.5 million and the gross margin improved to 16.8% from 16.0% a year ago. Earnings from operations rose by +9% to US$24.0 million while net income plummeted to US$16.6 million, a -16% fall from the same time in 2011.
“Amidst challenging global economic conditions and a sluggish US labor market, Kelly delivered solid third quarter results. We are very pleased that we were able to improve gross profit, keep expenses in line, and create leverage to improve our operating earnings by nearly 9% year-over-year, despite a deceleration in revenue,” said CEO Carl T. Camden said.
Total revenue in Europe, Middle East and Africa declined by -16% to US$263.1 million from US$314.6 million last year, a -6% reduction in constant currency. Some of Kelly’s largest European markets were impacted most by declining sales.
France in particular has proved troublesome for a number of international players such as Adecco and Randstad as market conditions have deteriorated over the year. Kelly saw revenue fall -21%, or -11% in constant currency, to US$60.3 million. In Switzerland, revenue declined by -11% to US$61.0 million, although in constant currency sales improved by +5%.
Elsewhere in the region, revenue fell -16% in constant currency in the United Kingdom to US$25.6 million. In Russia sales were down -5% in constant currency to $US31.7 million. Germany and Portugal saw revenue fall -6% and -7% in constant currency while Italy noted a sharp -18% fall in sales. In Norway, revenue increased by +3% in constant currency.
In Asia Pacific, sales slowed by -11% to US$105.9 million – in constant currency the fall was -8%. Australian revenues decreased by -3% and in Singapore revenue improved by +1% in constant currencies.
In the Americas, including the US, Canada, Mexico, Puerto Rico and Brazil, revenue was up +1% to US$985.2 million. In constant currency, revenue increased by +2%.
Shareholders were not encouraged by the financial results as the company’s stock price decreased -3.6% to US$13.80, a -17% fall from a year ago and +22.5% above the 52-week low of US$11.26 seen in July. The firm has a market value of US$512.77 million.