51Job on Q3 Results, Demand for Recruitment Services and Guidance (JOBS 3Q05 Conf Call Quotes)

Chinese online jobs site 51Job (ticker: JOBS) reported Q3 earnings results earlier today. The company's stock has been weak since falling sharply in January 2005. This was the result of a Q4 2004 sales hit -- HR departments reportedly depleted their budgets earlier than usual. As for Q3 2005 results President and CEO Rick Yan and CFO Kathleen Chien had the following to say during management's earnings conference call:

On Q3 Results:

In Quarter 3, we achieved a record gross margin level of 54.7%, 1% higher than Quarter 3 2004 and more than 4% higher than Quarter 2 2005.

We are especially pleased with the results in light of our observation that the growth in market demand for HR services continues to lag last year's levels.

…. our market assessment continues to indicate that the growth in market demand for recruitment services has been more moderate in 2005. We have heard similar feedback from a cross-section of HR managers stating that they had fewer new positions to fill and less employee turnover this year when compared with 2004. We believe that recruitment activities have been generally slower in 2005 when compared with 2004 across the industry.

On Future Guidance:

In the fourth quarter of last year, we experienced a marked decline in sales in the latter part of December, a situation that we have not seen in our past history. We will be monitoring this situation closely this fourth quarter…

….the important indicator for us will be after Chinese New Year. So that to us is going to be the best indicator for 2006. So it's probably too early to tell right now.

(Quotes are from the CCBN StreetEvents transcript.)

JOBS chart.