Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Robert Half International Placed a Good Quarter

Robert Half International (NYSE: RHI  ) reported a solid first quarter. Total revenue increased 5.8%, to $1.1 billion, and earnings per share increased 13%, to $0.45, besting analyst estimates by $0.01. This marked the 16th consecutive quarter of double-digit earnings-per-share growth. Below are my four key takeaways from the quarter.

1. Strong sales growth at home and abroad
Sales growth was stronger both domestically and internationally. Keeping in line with recent trends, domestic results were better. Staffing revenue in the United States grew 6.4%. Weak employment in Europe has been a consistent drag on growth -- international staffing revenue fell every quarter in 2013. But we may have hit a bottom, as international revenue didn't fall this quarter. It actually increased, though only by a minuscule amount -- 0.1%.

2. Profitability continues to improve
The big story at Robert Half isn't sales growth, it's about improving profitability. During the lows of the Great Recession, the company's profits fell dramatically. In 2009, the company reported 2.2% operating margins. Since then, the company has expanded margins every year. In this quarter, operating margins increased 9.4%. That's why the company has four years of double-digit growth in profits.

3. The balance sheet remains rock solid
The company has $268 million in cash and only $1.3 million in debt. And the business model doesn't require large investments in physical capital to fund growth. This allows the company to pay out excess cash to shareholders. During the quarter, the company repurchased 825,000 shares. The diluted share count today is 1.6% lower than a year ago. And the company pays a 1.7% dividend.

4. Management is predicting a brighter future
According to CEO Harold Messmer, demand for staffing services is strong, and it's actually been accelerating in the past few months. Even Europe, a perpetual weak spot, is improving. Here's what he said on the earnings call:

Demand for our professional staffing services and Protiviti consulting solutions remained solid during the first quarter, with growth rates accelerating in March and so far in April. We were also pleased to see higher staffing demand outside the United States, including Europe.

And, the long-term trend toward temporary workers seems to be playing out. Businesses are increasing employing temporary staff, especially domestically. Here's how Messmer describes the trend:

The first quarter saw the number of temporary workers as a percentage of total U.S. employment exceed the all-time high established in 2000. More and more businesses appreciate the value of interim staff to better manage variable workloads and specialized project demands.

Foolish Bottom Line
Robert Half continues to report respectable, if unspectacular results. Its profitability continues to increase, and earnings per share continue to march upward at double-digit rates. During the past year, the stock has generated a total return of 33% -- nicely outpacing the S&P 500, which returned 22%. Of course, the future of the company is heavily dependent on employment levels, but the trends seem positive.

Three stocks to own for the rest of your life
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2931380, ~/Articles/ArticleHandler.aspx, 9/3/2015 3:41:29 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Brendan Mathews

A Fool since 2005, Brendan is a research analyst on The Motley Fool's Stock Advisor newsletter. He enjoys scouring financial statements, pontificating on competitive advantage, and any outdoor activity.

Today's Market

updated Moments ago Sponsored by:
DOW 16,359.63 8.25 0.05%
S&P 500 1,950.55 1.69 0.09%
NASD 4,739.35 -10.63 -0.22%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/3/2015 3:25 PM
RHI $51.68 Up +0.31 +0.60%
Robert Half Intern… CAPS Rating: ****