What happened
Chinese job recruitment and human resources specialist 51job, Inc. (JOBS +0.00%) reported first-quarter earnings Thursday evening, and the stock plunged as much as 13.1% in Friday's trading session. The two events are probably related.
So what
Your average Wall Street analyst had been expecting 51job to post first-quarter earnings of roughly $0.72 per share on approximately $142 million in top-line revenue. The reported figures told a different story, beating the earnings estimate with a 32% year-over-year climb to $0.79 per share but falling short of the revenue projections. Sales rose 5.1% year over year to land at $136 million.
Image source: Getty Images.
Now what
Investors shrugged off the strong bottom-line result to focus on 51job's slow revenue growth. It's easy to see why, because the company typically posts double-digit growth figures. Management pinned the soft sales on economic uncertainty in China, inspiring business leaders to dial down their growth and recruitment plans. This week's renewed trade tensions between Beijing and Washington surely didn't help 51job, either.
So the market reaction makes sense, but 51job also showed that it knows how to turn a profit in times of leaner incoming revenue. Opportunistic investors might want to use this sudden discount to build their positions in this exciting growth stock.
