Earnings Preview: Manpower

| About: ManpowerGroup Inc. (MAN)

Manpower (NYSE:MAN) is expected to report Q2 earnings Friday, July 18, before market open with a conference call scheduled for 8:30 am ET.


The consensus estimate is $1.50 for EPS and $$5.96B for revenue, according to First Call. Management on its prior earnings conference call provided Q2 EPS guidance of $1.47 to $1.51, above consensus at the time. Also, guidance for gross margins was 18.3% to 18.5%. The CEO Joerres said at that time, "While economic conditions remain uncertain in parts of the world, we believe our team, coupled with the strength of our portfolio of services, will deliver solid results in the second quarter."

Analyst Views

Since then, we have seen a few downgrades in Manpower shares on the Street. On July 10, Banc of America downgraded the shares to Neutral from Buy as it believed the potential EPS upside from Forex had played out and it saw no near-term catalyst for the stock. The firm lowered its target to $59 from $76.

More recently, on July 14, Goldman downgraded to Sell from Neutral citing signs of weakness in European labor markets. The firm cut its target to $47 from $60. Goldman said that while it does not have a strong view on whether Manpower will beat or miss Q2 earnings, it believes that expectations for 2H08 and 2009 remain too high. The believe is that as Street estimates come down, Manpower shares will underperform.

BMO Capital says that fears of a European slowdown are just beginning, likely tempering some of the near-term growth expectations for Manpower. Key issues for the conference call: Forward guidance and an outlook on the US and European job markets.

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