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Robert Half’s Q3 revenue up 2%, flattening seen

Robert Half’s Q3 revenue up 2%, flattening seen

October 27, 2016

Main content

Professional staffing firm Robert Half International Inc. (NYSE: RHI) reported revenue rose 2.0% in the third quarter and was up 2.4% on a same billing day, constant currency basis. However, the company reported a flattening revenue growth began in July as well as a trend in client companies taking longer to make hiring decisions

(US$ thousands)

Q3 2016

Q3 2015 

% change

% change on a constant currency, same billing day basis

Net service revenue

$1,338,541

$1,312,718

2.0%

2.4%

Gross margin

$552,509

$549,801

0.5%

Gross margin percentage

41.3%

41.9%

Net income

$90,569

$96,725

-6.4%

Quote

“Now on the pace of deceleration, I would say that July - we actually ended July stronger than we began it,” Chairman and CEO Harold Messmer Jr. said in a conference call with analysts. “We were encouraged by that. August wasn’t bad. But then September, where we usually start getting a sequential lift in September we did not see the lift that we typically get. Instead it was sequentially about flat. And then again, traditionally we get even more lift yet again in October and we did not see that lift either. So it is essentially sequential flattening starting in July rather than the lift that we typically see in September and early October.”

Revenue by segment

(US$ thousands)

Q3 2016 

Q3 2015

% change

% change on a constant currency, same billing day basis

Accountemps

$452,338

$434,152

4.2%

4.9%

OfficeTeam

$245,445

$249,087

-1.5%

-1.3%

Robert Half Technology

$167,566

$170,211

-1.6%

-1.4%

Robert Half Management Resources

$150,899

$146,372

3.1%

3.7%

Robert Half Finance and Accounting

$105,117

$110,748

-5.1%

Protiviti

$217,176

$202,148

7.4%

7.8%

Revenue growth by geography and temp/perm

Year-over-year revenue growth rates (constant currency, same billing day basis)

2015

2016

Q2

Q3

Q4

Q1

Q2

Q3

Global

Accountemps

10.1%

7.6%

7.5%

8.3%

6.5%

4.9%

OfficeTeam

10.8%

8.3%

5.8%

3.7%

0.6%

-1.3%

Robert Half Technology

18.8%

15.4%

10.2%

6.2%

0.9%

-1.4%

Robert Half Management Resources

7.9%

2.9%

7.1%

7.7%

9.4%

3.7%

Temporary and consultant staffing

11.3%

8.3%

7.4%

6.7%

4.5%

2.1%

Permanent placement staffing

13.0%

13.6%

8.2%

8.6%

2.1%

-4.5%

United States

Temporary and consultant staffing

12.4%

9.8%

8.2%

7.3%

3.5%

0.6%

Permanent placement staffing

18.6%

16.1%

10.5%

11.6%

2.7%

-5.0%

International

Temporary and consultant staffing

7.7%

3.1%

4.4%

4.5%

8.9%

8.8%

Permanent placement staffing

3.1%

8.9%

3.5%

2.0%

0.8%

-3.4%

Guidance

The company forecasts fourth-quarter revenue of $1.25 billion to $1.31 billion.

Share price and market cap

Shares in Robert Half fell 6.76% to $36.81 in early afternoon trading today, and the company had a market cap of $4.72 billion, according to Yahoo.