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Manpower revenue up, some U.S. 'stabilization'

July 18 2008

Foreign operations boosted second-quarter revenue of Manpower Inc. (NYSE: MAN), and the company reported some stabilization in the United States.

The world's second-largest staffing firm posted a 17.3% increase in second-quarter revenue to $5.90 billion from $5.03 billion in the same period last year. In constant currency, however, revenue rose 5.4%.

"We were able to increase our revenues to record levels, contributed primarily by many of our major European countries," Chairman and CEO Jeffrey Joerres said. "At the same time, we have experienced some stabilization in the U.S. operations."

In the U.S., revenue rose 0.6% to $491.6 million from $488.6 million in the second quarter of 2007. But, excluding acquisitions, revenue was down 9%, Joerres said in a conference call with analysts.

Manpower's European operations outside of France and Italy posted a 29.6% increase in revenue to $2.05 billion. In constant currency, the increase was 17.6%. Manpower's Italian second-quarter revenue of $441.4 million was up 7.6% on a constant currency basis.

Executives did report a softening market in some areas of Europe. And, in France, revenue was down 5.4% on a constant currency basis to $1.96 billion.

The company's Jefferson Wells division's second-quarter revenue fell 9.6% to $75.8 million. Revenue at its Right Management operations rose 9.4% to $115.7 million. The increase was 9.9% in constant currency.

Manpower's second-quarter gross margin slipped to 19.5% from 20.3%.

Second-quarter net income fell 33.0% to $107.4 million from $160.4 million. The decrease was 42.5% on a constant currency basis.

Manpower said second-quarter results included a net charge of $14.8 million. The company received $35.2 million from a payroll tax break in France, but that was more than offset by a $50.0 million charge involving an increase in its legal reserve for an investigation by the French Competition Council.

The company's second quarter of 2007 received a $57.2 million boost from a French tax break.

The company estimates U.S. third-quarter revenue growth of between 7% and 9% including acquisitions, CFO Mike Van Handel said in the conference call with analysts. Excluding acquisitions, revenue will contract, but at a slower rate than the second quarter, he said.

Van Handel said overall third-quarter revenue growth is estimated at between 2% and 4%.

Manpower Inc. (NYSE: MAN)
For the first quarter ended June 30, 2008, compared with the same period in 2007.
Revenue: $5.90 billion, +17.3%
Net income: $107.4 million, -33.0%

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