Business is starting to pick up at 51job (JOBS). The Chinese provider of Internet-based recruitment services posted better-than-expected quarterly results after Monday's market close.
Revenue clocked in at $81.9 million, 11% ahead of the prior year's second quarter. That was ahead of 51job's own guidance -- targeting $77.4 million to $80.7 million in top-line results -- and also ahead of the $81.75 million that Wall Street pros were forecasting.
51job's profit of $0.38 a share was also ahead of the $0.35 a share that analysts expected. It's a notable achievement. This is the first time in more than a year that 51job has landed ahead of Wall Street's profit target. It had fallen short in three of the four previous quarters and simply met expectations the other period.
The model at 51job has changed over the years. When it went public 11 years ago at $14, most of its revenue was being generated from printed job listings that it would wedge into weekend editions of more than two dozen regional newspapers throughout China. As online recruitment became a bigger part of 51job's business, it retreated from the old-school 51job Weekly listings, and these days print advertising accounts for an inconsequential $0.2 million in quarterly revenue. Online recruitment is now the biggest driver, but it's not growing as quickly as its other human resources services.
In theory, things should continue to get better. 51job and other Chinese companies had to implement a 6% policy change last June that has deflated revenue over the past year. That should no longer be a factor, at least in terms of year-over-year growth comparisons. However, 51job's guidance offers a mixed outlook. It's projecting a profit of $0.36 a share to $0.40 a share on $81.5 million to $84.7 million in revenue for the current quarter. Analysts are perched at the low end of that earnings range, but they're also forecasting $86.56 million in revenue.
That single gray cloud -- weak top-line guidance -- is substantial. It represents weak sequential growth and a possible decline if it lands on the low end. The good news is that 51job also provided conservative guidance three months ago, blowing through those soft figures on Monday afternoon. Investors better hope that it's playing the same game this time around.
