IT Staffing Report: May 30, 2013

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US public IT staffing firms Q1 revenue mixed bag; Worldwide IT services revenue up 3.8%

Publicly traded information technology staffing companies’ first quarter results were a mixed bag in the first quarter of 2013 compared to the same quarter in 2012. 

On Assignment Inc.’s (NYSE: ASGN) Oxford grew 21 percent year over year during the first quarter while its Apex division posted revenue growth of 14.4 percent.. They were followed by Mastech Holdings Inc. (NYSE MKT: MHH), with 9.6 percent growth in the same time period. Computer Task Group’s IT staffing revenue were up 5.1 percent; Robert Half International Inc.’s (NYSE: RHI) IT division was posted 4.6 percent in year-over-year revenue growth; and Kforce Inc. (NASD: KFRC) reported IT staffing revenue growth of 1.5 percent during the quarter.

On Assignment Inc. noted particularly strong growth in the IT end markets. “The pricing environment remained steady in the quarter and we expect to see some increase in our gross margin as the business mix shifts in future quarters,” said Rand Blazer, president of Apex, On Assignment. “Bill rates went up this past quarter by a couple of percentage points and we expect to see bill rates continue to improve. The tide of the labor market, the opportunity to renegotiate and/or discuss with clients what the proper bill rates are becomes more real,” he added.

CDI Corp. (NYSE: CDI) noted that its IT staffing revenue fell due to weakening in demand from some key clients. Still the company said it sees demand being driven by ERP, mobile, cloud computing and social media.   

Kforce also cited good demand for IT skills. “Intra quarter trends for tech flex revenue showed a decline in January and increases in February and March,” said Joe Liberatore, president at Kforce. “Our national footprint and diversified service offerings also allows us to service clients in the industries with greatest demand for technology professionals. Those industries that performed the best in Q1 were healthcare, comprising approximately 18 percent of tech revenues, telecom and retail. Healthcare tech has grown 15 percent year over year. Late Q1 and early Q2 activity in tech flex is trending nicely as we expect Q2 2013 revenues to be up and year over year growth rates to improve from Q1, 2013 levels.”

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Meanwhile, publicly held IT services companies posted median year-over-year growth of 3.8 percent in their worldwide IT services revenue in the first quarter of the year. Cognizant Technology Solutions Corp. (NASD: CTSH) topped the charts with 18 percent year-over-year growth for the quarter followed by Syntel Inc. (NASD: SYNT) with 10.8 percent year-over-year growth.

Click on chart below to enlarge.

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