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Robert Half International Inc. Reports Operating Results (10-Q)

May 04, 2012 | About:
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10qk

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Robert Half International Inc. (RHI) filed Quarterly Report for the period ended 2012-03-31.

Robt Half Intl has a market cap of $4.31 billion; its shares were traded at around $29.46 with a P/E ratio of 25.3 and P/S ratio of 1.1. The dividend yield of Robt Half Intl stocks is 2%. Robt Half Intl had an annual average earning growth of 21.2% over the past 10 years.

Highlight of Business Operations:

Temporary and consultant staffing services revenues were $830 million for the three months ended March 31, 2012, increasing by 16% compared to revenues of $715 million for the three months ended March 31, 2011. On a constant-currency basis, temporary and consultant staffing services revenues increased 17% for the first quarter of 2012 compared to the first quarter of 2011. In the U.S., revenues in the first quarter of 2012 increased 20% compared to the first quarter of 2011. The Companys temporary and consultant staffing services revenues from foreign operations increased 6% compared to the first quarter of 2011. On a constant-currency basis, the Companys revenues from foreign operations increased 9% in the first quarter of 2012 compared to the first quarter of 2011.

Permanent placement staffing revenues were $83 million for the three months ended March 31, 2012, increasing by 23% compared to revenues of $68 million for the three months ended March 31, 2011. On a constant-currency basis, permanent placement revenues increased 24% for the first quarter of 2012 compared to the first quarter of 2011. In the U.S., revenues in the first quarter of 2012 increased 29% compared to the first quarter of 2011. Historically, demand for permanent placement services is even more sensitive to economic and labor market conditions than demand for temporary and consulting staffing services and this is expected to continue. The Companys permanent placement staffing services revenues from foreign operations increased 15% compared to the first quarter of 2011. On a constant-currency basis, the Companys revenues from foreign operations increased 18% in the first quarter of 2012 compared to the first quarter of 2011.

Gross margin dollars from the Companys temporary and consultant staffing services represent revenues less direct costs of services, which consist of payroll, payroll taxes and insurance costs for temporary employees, and reimbursable expenses. Gross margin dollars for the Companys temporary and consultant staffing services division were $295 million for the three months ended March 31, 2012, increasing by 20% compared to $246 million for the three months ended March 31, 2011. On a constant-currency basis, temporary and consultant staffing services gross margin dollars increased 21% for the first quarter of 2012 compared to the first quarter of 2011. As a percentage of revenues, gross margin for temporary and consultant staffing services was 35.6% in the first quarter of 2012, up from 34.4% in the first quarter of 2011. The higher temporary and consultant gross margin percentage is primarily the result of higher bill rates and higher conversion revenues. Conversion revenues are earned when a temporary position converts to a permanent position. As there are no direct costs related to conversion revenues, the gross margin percentage is favorably impacted as the mix of conversion revenues increase.

Gross margin dollars for risk consulting and internal audit services represent revenues less direct costs of services, which consist primarily of professional staff payroll, payroll taxes, insurance costs and reimbursable expenses. Gross margin dollars for the Companys risk consulting and internal audit division were $24 million for the three months ended March 31, 2012, decreasing by 4% compared to $25 million for the three months ended March 31, 2011. On a constant-currency basis, risk consulting and internal audit gross margin dollars decreased 4% for the first quarter of 2012 compared to the first quarter of 2011. As a percentage of revenues, gross margin for risk consulting and internal audit services was 23.1% in the first quarter of 2012, down from 25.2% in the first quarter of 2011. The year-over-year margin decrease is primarily due to lower staff utilization levels outside of the United States.

Operating Income. The Companys total operating income was $80 million, or 7.9% of revenues, for the three months ended March 31, 2012, increasing by 80% from $44 million, or 5.0% of revenues, for the three months ended March 31, 2011. For the Companys temporary and consultant staffing services division, operating income was $69 million, or 8.3% of applicable revenues, up from $38 million, or 5.3% of applicable revenues, in the first quarter of 2011. For the Companys permanent placement staffing division, operating income was $13 million, or 16.0% of applicable revenues, up from an operating income of $8 million, or 11.6% of applicable revenues, in the first quarter of 2011. For the Companys risk consulting and internal audit services division, operating loss was $2 million, or negative 2.3% of applicable revenues, which remained flat from an operating loss of $2 million, or negative 1.6% of applicable revenues, in the first quarter of 2011.

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