It’s been a month since Robert Half (RHI) last reported earnings, and shares have gained about 3.7% during that time, outperforming the S&P 500.
Will the recent positive trend continue leading up to the next earnings release, or is Robert Half due for a setback? Before we dive into how investors and analysts have reacted recently, let’s take a quick look at the most recent earnings report to better understand the important catalysts.
Robert Half: Q2 earnings below estimates
Robert Half International reported lower-than-expected results for the second quarter of 2024.
Quarterly earnings of 66 cents per share missed the consensus mark by 7% and fell 34% year-over-year. Revenue of $1.47 billion missed the consensus mark by 1.7% and fell 10.2% year-over-year.
Sales of Talent Solutions and Protiviti decline
Talent Solutions revenue of $936 million decreased 14% year over year on an adjusted basis and was below our estimate of $1 billion. Talent Solutions revenue in the U.S. of $701 million decreased 15% year over year. Talent Solutions revenue outside the U.S. decreased 10% year over year on an adjusted basis to $235 million.
Protiviti revenues were $487 million, down 1% year-over-year on an adjusted basis and below our expectation of $487.9 million. Protiviti revenues in the U.S. of $399 million increased 3% year-over-year on an adjusted basis. Protiviti revenues outside the U.S. of $88 million decreased 16% year-over-year on an adjusted basis.
Foreign currency fluctuations reduced total revenue by $6 million, Talent Solutions revenue by $5 million and Protiviti revenue by $1 million. The quarter had 63.5 billing days compared to 63.3 billing days in the year-ago quarter.
Margin agreement
Adjusted gross profit for the quarter was $579.9 million, down 12.9% from the prior year. Adjusted gross profit margin of 39.4% decreased 120 basis points from the prior year.
Balance sheet and cash flow indicators
Robert Half ended the quarter with cash and cash on hand of $547.4 million, compared to $540.9 million at the end of the previous quarter. Operating cash was $142 million for the quarter and capital expenditures were $12.4 million. RHI paid dividends of $55 million and repurchased $60 million of stock during the period.
Forecast for Q3
For the third quarter of 2024, Robert Half expects revenue of $1.39 billion to $1.49 billion. Earnings per share are expected to be between 53 and 67 cents.
How have the estimates developed since then?
It turns out that the latest estimates have been trending downward over the past month.
The consensus estimate has shifted by -19.07% due to these changes.
VGM results
Robert Half currently has a good growth score of B, but lags significantly behind in terms of momentum score with an F. On the value side, however, the stock received a grade of B, which puts it in the second quintile for this investment strategy.
Overall, the stock has a VGM score of B. If you are not focused on a strategy, this score may be of interest to you.
outlook
Estimates for the stock have been trending downward across the board, and the magnitude of these revisions suggests a downward trend. It’s no surprise that Robert Half has a Zacks Rank #4 (Sell). We expect the stock to underperform in the coming months.
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Robert Half Inc. (RHI): Free Stock Analysis Report
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