The slowdown continues at 51job (NASDAQ:JOBS). The Shanghai-based provider of online recruitment services posted another quarter of decelerating top-line growth, shortly after Monday's market close. Its guidance suggests that things aren't getting any better in the current period.

Revenue rose 7.6% in local currency -- to the U.S. equivalent of $140.4 million -- for the three months ending in June. This is the first time in more than four years that 51job failed to achieve double-digit top-line growth.

Investors were ready for the deceleration: 51job's guidance three months ago was calling for just 4% to 9% in revenue growth for the second quarter. The stock still moved lower on Tuesday, largely as a result of 51job's cautious stance and uninspiring guidance.

51job employees in orange shirts, on the patio outside of 51job headquarters in China.

Image source: 51job.

Showing up to work

The Chinese economy is slowing, and that's giving employers a good reason to scale back on spending and be more selective when it comes to adding new hires. The online recruitment services that have been a standout over the past decade for 51job grew the company's top line by less than 4%. It was a 15% surge in its remaining human resource-related operations that helped prop overall results into 51job's guidance range.

The human resources side is benefiting from the implementation in China of new tax and social insurance regulations, moves that find companies seeking guidance from 51job and other HR specialists. The online recruitment services business is facing a stiff headwind from 51job's decision to cull some of the smaller employers on its platform; it's been focusing on larger accounts, and it's been successful in getting them to spend more, with average revenue per unique employer up 20% over the past year.

Gross margin contracted slightly, but 51job's operating margin widened to 28% from 24.4% a year earlier. Adjusted earnings per share clocked in at $0.86, well ahead of the per-share profit of $0.62 to $0.66 that it was forecasting back in May, and just above the $0.82 per share that it served up in the second quarter of last year.

Guidance was where a decent report started to get ugly. 51job sees revenue clocking in between $133.3 million and $139.1 million for the current quarter, a decline of 4% in local currency at worst, and flat with the prior year's showing at best. The performance would also represent a sequential dip even if it landed at the high end of that range, something that we haven't seen between the second and third quarters since 2008, according to data provided by S&P Global Market Intelligence.

51job sees adjusted earnings per share of $0.58 to $0.63, well shy of the $0.74 per share it cranked out in the third quarter of last year. It's fair to say that 51job's been woefully conservative in its bottom-line outlooks in the two previous periods. But when guidance calls for a decline in adjusted earnings, with flat revenue growth at best, it's not a good look.

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