There's plenty of hiring taking place in China's still growing economy, and 51job (JOBS) keeps getting the job done. The Chinese provider of Internet-based recruitment services posted financial results for its third quarter last week.
Revenue clocked in at $82.6 million for the quarter, and while that's a mere sequential uptick from the $81.9 million that it posted during the second quarter three months earlier, it's still a healthy 11% gain from the prior year's third quarter.
It also could have been worse. 51job's guidance back in August called for $81.5 million to $84.7 million in revenue. Landing at the low end would've resulted in a sequential decline.
The news was even better on the bottom line, where 51job's profit of $0.41 a share landed just ahead of its August guidance of earnings per share coming in between $0.36 and $0.40. The market liked the report this time around, sending the stock 3% higher on the day. However, the shares have gone on to close lower for three consecutive trading days after that, more than giving up its initial gain.
The 51job model has evolved over time. It was initially a print-based publisher when it went public 11 years ago, inserting weekly job listings in more than two dozen regional Chinese newspapers on weekends. It became a quick learner in cyberspace, rolling out a popular online recruitment platform that cashed in on the brand equity of its 51job Weekly print missives. Online recruitment now makes up nearly two-thirds of the revenue.
The balance isn't coming from its original print business. It's been retreating out of that ineffective format. Now 51job is using its leadership position in online recruitment to expand into other human resources services, and that category is growing even faster than online recruitment (up 16% year over year to account for more than a third of the revenue versus the 8% gain in online recruitment).
There aren't any hiccups with its top-line guidance this time around. 51job expects to close out the year with $91.3 million to $94.4 million in revenue for the fourth quarter. That's the good news. The bad news is that 51job's earnings outlook finds bottom-line results landing between $0.39 a share and $0.42 a share. We're eyeing a possible sequential dip if it lands at the low end, and sequential margin contraction even at the high end.
51job is in a good place. Even if China's economic growth continues to decelerate there should still be healthy employment demand. There are now 94 million registered users to 51job's namesake site, and those with positions to fill continue to notice. Average revenue per employee-seeking company keeps moving higher. Yes, 51job keeps living up to the market's never-ending job interview.
