With stagnation in employment, it's been rough for staffing companies. Might it be different for companies that focus on the medical industry, with all the shortages it's said to be having? Not really. Companies like Cross Country Healthcare (NASDAQ:CCRN) and Medical Staffing Network Holdings (NYSE:MRN) have been mostly poor performers for investors since debuting several years ago.

But AMN Healthcare Services (NYSE:AHS) has shown signs of improvement, or at least of the bad news leveling off. Its recently reported revenue for the fourth quarter was $158.3 million, down just slightly from $159.6 million in the same period a year ago. During this period, though, net income took a less modest decline, dropping from $4.9 million to $4.5 million.

For 2004 as a whole, revenues were $629 million, which was down from $714.2 million in 2003. Net income declined from $37.8 million to $17.3 million.

Founded in 1985, AMN is the leading provider of travel nurse staffing services. The company recruits nurses and allied health professionals and places them on temporary assignment of variable lengths (usually the length is 13 weeks). Because of the diversity of the nursing industry, AMN has a multibrand approach. The brands include American Mobile Healthcare, Medical Express, Nurses Rx, Preferred Healthcare Staffing, O'Grady-Peyton International, and TheraTech Staffing. This has proved to be an effective way to attract qualified recruits.

As for expectations, AMN forecasts earnings per share of $0.64 to $0.68 in 2005. This compares to $0.55 per share in 2004.

On the upside, the health-care industry has been shifting its approach to include more temporary staffing, and AMN is well-positioned to capitalize on this market in the long term. Near-term success is a different matter in today's choppy markets -- both the stock market and the employment market -- and investors would do well to tread with caution before stocking up on staffing stocks.

Fool contributor Tom Taulli does not own shares mentioned in this article.