Organizations are enlisting more employees to take care of the climbing demand for products and services. A survey suggests 25% of all employers plan to recruit part-time workers, and 44% of organizations plan to contract full-time workers, at par with a year ago. ManpowerGroup (MAN, Financial) is the fourth-biggest staffing organization in the U.S., and it will profit from improved staffing market conditions. The company has a global operation, but the major contribution to its revenue is from its U.S operations. As per staffing industry analysts, the U.S staffing business sector will develop to $139.4 billion in 2014 from $100 billion in 2012. The U.S. is relied upon to encounter a stable livelihood environment in the following six months because of an ascent in provisional occupations.
Strong performance
The company posted second quarter results for the fiscal and it was quite strong in execution. The company posted total revenue of $5,321.7 million, up 5.6%, year over year. Positive revenue momentum continued in major geographies mainly European countries. The company also added on to number of billing days in the current year compared to last year in some countries.
Gross profits were also up 7.3% to $897.3 million courtesy growth in revenue, although high cost of service partly offset the gross profits. Operating profit stood at $187.4 million, up 46.3% from the former year quarter.
Earnings per share came in at $1.35, beating the consensus by $0.05 and up 28.6% from $1.05 delivered in the prior year quarter.
ManpowerGroup also initiated a global restructuring program, which is poised to improve its operating margin and translate into revenue growth. The restructuring program mainly focused on higher margin services for profitable revenue growth. Furthermore, the company is expanding the presence of its high margin Manpower professional brand, Experis. The Experis brand is specialized in recruiting highly skilled professionals for companies to enhance their competitiveness.
Revenues from franchise growing signifying brand value of Manpower
Franchisee revenue growth indicates more worldwide reorganization and higher brand value of ManpowerGroup. The first half of the financial year, revenues for services in corporate charges from franchise workplaces was $11.9 million and $11.4 million for the six months finished June 30, 2014 and 2013, separately. These charges are fundamentally focused around incomes produced by the franchise workplaces, which were $543.2 million and $507.0 million for the six months finished June 30, 2014 and 2013, separately.
Guidance
Staffing firms customarily think back in July on what they've fulfilled in the first piece of the year and anticipate what the second half holds. If the first half wasn't what it ought to have been, staffing firms can utilize the second half to win the numbers game.
With a strong second quarter, ManpowerGroup now expects to continue the growth momentum. It anticipates third-quarter 2014 earnings per share in the range of $1.46 to $1.54. Manpower expects revenues to be up in the range of 5% to 7%. Operating margin is expected to be up 50 bps and in the range of 3.7% to .9%.
Share repurchase and dividends
The company also incorporated its repurchase program; under this program, it repurchased shares worth $17 million. The company also returned $39 million to share holders in form of dividends
Conclusion
A few organizations' fiscal years begin later and they ratchet up their enlisting endeavors later in the year (for those organizations, it's the start of the financial year). Additionally, government spending can counterbalance poor early enlisting. Government years begin on July 1, and numerous entities need to use their funding before the end of their year in light of the fact that they lose funds assigned to that year or can start fresh in the summer. These are some of the components that can power development for Manpowergroup in the second half of 2014 which will additionally help the stock price to climb.
