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Robert Half reports strongest staffing growth in tech and perm placement

October 22, 2015

Robert Half International Inc. (NYSE: RHI) reports economic trends are in its favor. Third-quarter revenue rose 7.2% at the Menlo Park, Calif.-based professional staffing provider to $1.31 billion. The increase was 10.9% when adjusted for constant currency. Strongest growth was in Robert Half Technology, up 15.4% in constant currency, and permanent placement staffing, up 13.6% in constant currency.

The company reported a weaker-than-expected August in a conference call with analysts, but said it bounced back in September.

US staffing revenue was $891 million in the third quarter, and international staffing revenue was $220 million.

  Q3 2015 (US$ thousands) Q3 2014 (US$ thousands) % growth Q3 2015 constant currency
Net service revenues                                                         1,312,718                                            1,224,308 7.2% 10.9%
Gross margin                                                            549,801                                               505,220 8.8%  
Gross margin percentage 41.9% 41.3%    
Net income                                                               96,725                                                  85,184 13.5%  

Quote

“We continue to see healthy demand for our services across the board, and we believe we have a number of reasons to be optimistic about our prospects for future growth,” Chairman and CEO Max Messmer said in a conference call with analysts. “Economic trends are in our favor. In the United States, the unemployment rate hit its lowest level in seven years in August and remained there in September. The four-week moving average for initial jobless claims is near a 42-year low. Non-US markets also are improving, particularly in Europe. The unemployment rate in the United Kingdom recently hit a seven-year low.”

Messmer continued: “Technology remains the hottest segment of staffing, both here and abroad. We are investing in Robert Half Technology to take advantage of this demand. It’s not just technology, however. There is a widening skills gap in a number of other professional specialty areas that has many employers struggling to find the talent they need. This presents us with the opportunity to partner with them to locate these workers, and that is precisely what our field teams are doing right now.”

Revenue by segment

  Q3 2015 (US$ thousands) Q3 2014 (US$ thousands) % growth Q3 2015 constant currency
Accountemps                                                            434,152                                               416,413 4.3% 7.6%
OfficeTeam                                                            249,087                                               237,723 4.8% 8.3%
Robert Half Technology                                                            170,211                                               150,166 13.3% 15.4%
Robert Half Management Resources                                                            146,372                                               149,923 -2.4% 2.9%

Revenue growth by geography and temp/perm

  Year-over-year revenue growth rates
2014 2015
Q2 Q3 Q4 Q1 Q2 Q3
Global            
Accountemps 6.5% 10.1% 9.6% 8.0% 6.6% 4.3%
OfficeTeam 9.1% 14.1% 12.6% 9.5% 6.9% 4.8%
Robert Half Technology 7.8% 11.0% 11.4% 16.2% 16.6% 13.3%
Robert Half Management Resources 12.4% 18.9% 14.1% 10.4% 2.0% -2.4%
             
Temporary and consulting staffing 8.2% 12.5% 11.3% 10.0% 7.5% 4.8%
Permanent placement staffing 13.8% 16.0% 12.8% 6.2% 7.5% 8.2%
             
United States            
Temporary and consulting staffing 9.3% 13.2% 13.8% 14.8% 12.4% 9.9%
Permanent placement staffing 15.8% 21.8% 20.8% 15.6% 18.7% 16.2%
             
International            
Temporary and consulting staffing 4.6% 10.4% 3.1% -6.0% -9.3% -12.8%
Permanent placement staffing 10.6% 6.3% -0.6% -9.8% -11.9% -7.3%

Guidance

Robert Half estimated fourth-quarter revenue will be between $1.285 billion to $1.335 billion, an increase of 7% at the midpoint of the range or 10% in constant currency.

Share price and market cap

Shares in Robert Half closed down 4.50% to $50.03 in early afternoon trading today. The company has a market cap of $6.73 billion, according to Yahoo!