What: Shares of staffing agency Robert Half International (NYSE:RHI) slumped today following the company's second-quarter report. Robert Half missed analyst expectations across the board, despite reporting revenue and earnings growth. At 11 a.m. EDT, the stock was down about 12.5%.
So what: Robert Half reported quarterly revenue of $1.34 billion, up 5.7% year over year but about $20 million short of the average analyst estimate. All of the company's segments reported revenue growth, with Accountemps, which generates about one-third of total revenue, increasing revenue by 7.1%.
Earnings per share came in at $0.71, up from $0.67 during the prior-year period but $0.02 lower than analysts were expecting. Operating income was essentially flat year over year, with the per-share earnings increase mostly driven by a slightly lower tax rate and share buybacks.
"Our second-quarter results reflect continued solid demand for our professional staffing and consulting services. Our financial staffing divisions and Protiviti reported the strongest year-over-year revenue gains," said Harold Messmer Jr., chairman and CEO of Robert Half.
Now what: While Robert Half's results were largely positive on an absolute basis, the company's guidance may be contributing to the slumping stock price. During the third quarter, it expects revenue to grow by 4% year over year at the midpoint of its guidance range, and EPS is expected to shrink by 3%. The company blamed the conversion to a new front-office CRM and project management system for the weak guidance.
Despite reporting seemingly solid results, an earnings miss and lackluster guidance have sent shares of Robert Half tumbling.