Three months ago, I detailed the task laid at the feet of new Resources Global
What analysts say:
- Buy, sell, or waffle? The 11 analysts following RG aren't optimistic, giving the stock just two buy ratings and nine holds.
- Revenue. On average, they're looking for 9% sales growth to $204 million.
- Earnings. However, profits are expected to drop 27% to $0.19 per share.
What management says:
Last quarter, I chided management for its failure to include a cash flow statement in its earnings release, forcing investors to guess at how much cash the business was generating. Two weeks later, the missing document finally showed up in the firm's 10-Q filing. Drumroll, please...
RG generated just $13.6 million in the first six months of fiscal 2008, a 31% drop in comparison to fiscal H1 2007, and much, much worse than the 4% decline in net profit.
What management does:
No surprises here. With revenue growth continuing to chug right along, this remains a margin story through and through. At all levels -- gross, operating, and net -- RG has experienced steadily declining profitability over the past year. Granted, even the present 11% operating margins are respectable, roughly midpoint between what Robert Half
|
8/06 |
11/06 |
2/07 |
5/07 |
8/07 |
11/07 |
|
|---|---|---|---|---|---|---|
|
Gross |
39.4% |
39.4% |
39.3% |
39.2% |
38.8% |
38.5% |
|
Operating |
13.8% |
13.2% |
12.6% |
12.1% |
11.6% |
11% |
|
Net |
8.7% |
8.2% |
7.8% |
7.4% |
7.2% |
6.8% |
One Fool says:
So while I admit that the horse is quite dead at this point, allow me to give it one last kick: Franke's job is to stem the slide in margins.
He's got a fine client base to work with, with brand-name customers like Charles Schwab
What did we expect out of Resources Global last quarter, and what did we get? Find out in:
