Revenue gains may be decelerating at 51job (NASDAQ:JOBS), but there's still heady growth going on at the Shanghai-based provider of online recruitment services. 51job posted mixed financial results shortly after Thursday's market close. Its fourth-quarter report exceeded its earlier outlook, but its guidance calls for growth to decelerate sharply in early 2019. 

Let's start with the good news, where 51job's revenue rose 28.5% to hit $165.5 million in the fourth quarter. The report ends a run where top-line results topped 30% in each of the year's first three quarters, but the showing still finds 51job landing ahead of the 25% to 28% revenue growth it was targeting for the period three months ago.   

Employees on a balcony at 51job headquarters

Image source: 51job.

Click here for the latest earnings call transcript for 51job.

Getting the job done

Both of 51job's primary businesses fared well in the fourth quarter. Online recruitment services increased, rising 24% since the prior year's fourth-quarter showing and accounting for 58% of the top-line results. Other human-resources-related revenue, which accounts for the balance of the top-line mix, rose 35% for the period. The latter actually accelerated during the quarter, with 51job crediting gains in seasonal campus recruitment along with growth in business process outsourcing, training, and assessment services.

51job's flagship online recruitment services business was aided by a 34% surge in average revenue per employer. Average revenue per employer growing faster than the revenue being generated in online recruitment services naturally means that 51job's Rolodex is thinning out on that front, and it's largely by design. The number of unique employers that 51job is helping has declined by 7% over the past year as the high-tech job filler has made it a strategic priority to key in on higher-spending employers that are expanding their relationships through more products and services.

Once again, we see profitability growing faster than revenue. Adjusted earnings rose 35% to $63.4 million, or $0.97 a share. 51job was only forecasting adjusted earnings per share to clock in between $0.65 and $0.69.

51job has been historically conservative when it comes to guidance, and bulls are hoping that's the case again this time. Thursday afternoon's outlook for the current quarter calls for revenue to clock in between $136 million and $141.8 million. The significant sequential decline off the $165.5 million it just recorded in the fourth quarter isn't a big deal. There is seasonality to this business. However, the year-over-year comparison that takes into account holiday-related slowdowns in hiring shows top-line growth slowing to a 15% to 20% increase in local currency. 51job sees adjusted earnings per share of $0.62 to $0.66, modest improvement from the $0.60 a share it scored in last year's first quarter.  

Investors tend to emphasize weak guidance over a quarterly beat, explaining why the shares opened nearly 4% lower on Friday. At least one Wall Street pro -- Macquarie -- downgraded the stock following the mixed financial update. The stock continues to trade higher in 2019, and after three years of positive gains, it has proven itself worthy of overcoming any quarterly hiccups. The key now is if it can once again prove conservative with its quarterly business outlooks. 

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