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Net income fell 8.5% in the third quarter at Labor Ready Inc. (NYSE: LRW) while revenue rose 4.4%. And the company said it closed 47 branches in 2007 because of a downturn in demand.
"Although the operating environment in industrial staffing remains difficult," CEO Steve Cooper said, "we continued our positive momentum in same branch sales growth and stabilized our gross profit margin this quarter despite the minimum wage increase throughout the year."
Labor Ready reported net income of $22.7 million in the third quarter of 2007, down from $24.8 million in the same period last year.
Revenue rose to $390.7 million from $374.1 million. However, analysts had been estimating revenue of $394.5 million
Gross margin slipped to 32.1% from 32.3%.
The company had 919 branches at the end of the third quarter, after closing 47 during this year so far, and opening six in the third quarter. Still, Labor Ready reported it will close 16 more branches in the fourth quarter.
Revenue from branches open 12 months or longer rose 1.2% in the third quarter.
Labor Ready forecast fourth-quarter revenue in the range of $345 million to $350 million. Analysts had estimated $360.7 million.
Shares of Labor Ready fell 10.2% in late-morning trading to $18.81.
Labor Ready Inc. (NYSE: LRW)
For the third quarter ended Sept. 28, 2007, compared with the same period in 2006.
Revenue: $390.7 million, +4.4%
Net income: $22.7 million, -8.5%