Investors in Chicago-based relocation services provider Sirva
Sirva, a company with a market capitalization upwards of $1.3 billion, does an awful lot of different things: Organizations hire it to move its employees around the world, which means everything from helping folks buy and sell houses to moving their stuff and helping them set up lives in their new homes -- things such as orientation, cultural training, school location, and more. Competitors include Cendant
But the simple fact is that many of the companies that use services like Sirva's are cutting back. You can see it in the Q3 numbers: Total revenues rose year-over-year, but operating income and net profit moved back substantially. In the company's non-U.S. relocation services operation, revenues fell (if you ignore acquisitions and currency effects), and European market deteriorated.
This isn't just a Sirva-specific issue. The organizations that move employees around the world aren't operating the way they did 10 years ago: Rather than sending high-level managers overseas for years with their families and pets -- a rich deal for relocation consultants -- they're increasingly sending junior types on short jaunts, unaccompanied, with relatively little pre-assignment preparation. They're doing this for a simple reason: to save money.
And so, while the research out of the consulting firms insists that employees want more support, firms such as Sirva are being asked to demonstrate a return on that support. Sirva, meanwhile, is taking steps to stay strong, among them the planned $100 million buy of U.S.-focused relocation firm Executive Relocation. But overseas relocation was a large and growing part of Sirva's business in recent years, making yesterday's strong market reaction more than understandable.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this article.