ManpowerGroup saw its share prices climb to a four-year high on Thursday, after the global staffing company delivered a better-than-expected second quarter results, bolstering investor optimism that hiring activity is gaining momentum and is beginning to translate to meaningful profit recovery.
In intra-day trading, the stock surged to a record high of $53 before paring gains to end the session just up by 32.37 percent at $51.65 apiece.
In an updated report, ManpowerGroup Inc. (NYSE:MAN) said that it swung to a net income of $53.5 million in the second quarter of the year, reversing a net loss of $67.1 million in the same period last year.
Revenues increased by 7.5 percent to $4.86 billion from $4.52 billion year-on-year.
ManpowerGroup Inc. (NYSE:MAN) said that the current period includes the sale of its Jefferson Wells US business, strategic transformation program costs, restructuring costs, and a discontinued business liquidation charge, which, in aggregate, positively impacted earnings per share by $0.14.
Excluding the said items, EPS stood at $0.99, representing a 27 percent jump in constant currency in the second quarter of the year.
Financial results were also positively impacted by a stronger US dollar versus its peers.
On a constant currency basis, revenues increased by 6 percent compared with the same comparable period.
“In the second quarter we delivered strong results with revenues ahead of expectations. Results reflect good execution across our brands and markets, continued cost discipline and improving demand,” said ManpowerGroup Inc. (NYSE:MAN) Chairman and CEO Jonas Prising.
Upbeat for Q3
Management outlook added to investor enthusiasm.
Looking ahead, ManpowerGroup Inc. (NYSE:MAN) said that it was optimistic about growing its EPS for the third quarter of the year to a range of 152 percent to 179 percent, to $0.96 $1.06, from only $0.38 year-on-year, even after accounting for an unfavorable impact of 2 cents and a 44 percent effective tax rate.
Lower Hedge Fund Participation
Insider Monkey data showed that hedge fund participation edged lower in the first quarter of the year to 36 from 37 the quarter earlier.
However, the decline in participation was offset by higher participation from existing institutional investors.
In the same period, the 36 funds collectively owned $352.7 million worth of shares in ManpowerGroup Inc. (NYSE:MAN), versus only $262 million in the prior quarter.
The jump could indicate that existing institutional investors are seeing additional upside as improving labor demand, stronger execution, and operating leverage support the company’s earnings recovery.
