Manpower: Earnings Preview

| About: ManpowerGroup Inc. (MAN)
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Manpower Inc. (NYSE:MAN) is scheduled to report its second-quarter 2010 financial results before the bell on Wednesday, July 21, 2010. We believe that the company is better positioned than its competitors for the economic recovery. The company’s comprehensive range of services makes it a true global staffing firm.

First-Quarter 2010, a Synopsis

Manpower posted better-than-expected first-quarter 2010 results that topped the Zacks expectation on the heels of revenue growth across all geographies, effective cost management and a softer dollar.

The company posted a revenue growth of 12.5% year-over-year in first-quarter 2010. The quarterly earnings of 4 cents a share outpaced the Zacks Consensus Estimate of a loss of 7 cents and remained flat compared to the prior-year quarter. Strong foreign currencies relative to the U.S. dollar have favorably impacted net earnings by 3 cents a share.

Management now expects a total revenue growth of 16% to 18% in constant currency for second-quarter 2010. Manpower has forecasted second quarter earnings in the range of 14 cents to 22 cents a share, including an adverse impact of 10 cents due to the acquisition of COMSYS.

Second-Quarter 2010 Consensus

Analysts surveyed by Zacks, expect Manpower to post second 2010 earnings of 21 cents a share that remains at the high-end of the company’s guidance range. Of the 14 analysts covering the stock, only one analyst has revised his/her estimate downwards in the last 30 days, having no major impact on the consensus.

The current Zacks Consensus Estimate represents a year-over-year decline of 41.7%. The estimates in the current Zacks Consensus for the quarter range from a low of 17 cents to a high of 29 cents. With respect to earnings surprises, Manpower has topped the Zacks Consensus Estimate over the last four quarters in the range from 52.9% to 260%. The average remained at 141.5%. This suggests that Manpower has outperformed the Zacks Consensus Estimate by an average of 141.5% in the last four quarters.

Manpower in Neutral Lane

Manpower’s brand value and strong global network provides a competitive advantage and reinforces its dominant position in the market. The company stands to benefit from growth prospects in under-penetrated staffing markets.

Manpower provides services for the entire employment and business cycle including permanent, temporary and contract recruitment, employee assessment and selection, training, outplacement, outsourcing and consulting.

With improvement in economic conditions, Manpower’s staffing business is also stabilizing. However, Manpower’s Right Management and Jefferson Wells brands continue to struggle. Right Management witnessed a fall in demand for the counter-cyclical outplacement services whereas, Jefferson Wells that offers professional financial services continues to portray sluggish demand as companies still remain conscious of discretionary spending.