Monster Reports 1Q Profit But Offers Weak 2Q Guidance
April 28 2011 - 3:53PM
Dow Jones News
Monster Worldwide Inc. (MWW) reported better-than-expected
first-quarter earnings, due to strength in North America and higher
bookings, but the operator of a jobs website projected
current-quarter revenue below analysts estimates.
Chief Executive Sal Iannuzzi said Monster was being prudent with
its second-quarter guidance because of the possibility of some
large U.S. government transactions slipping into the third
quarter.
"Our pipeline as it pertains to the U.S. government is, if not
the most robust it's ever been, very close to it, but temporarily
we could have some continued sluggisheness as it goes through the
paces of the budget," he said.
For the second quarter, Monster expects per-share earnings
between 6 cents and 10 cents on revenue of $258 million to $269
million. Analysts, on average, expect earnings of 9 cents a share
and revenue of $269 million, respectively, according to a poll by
Thomson Reuters.
Monster shares, down 25% this year, slipped 3.6% to $17.15 in
after-hours trading.
The company did reiterate its 2011 guidance, and Iannuzzi struck
an optimistic tone, saying the overall recruitment and economic
environment continue to improve.
"Psychology is much more positive today than it was even a year
ago. Last year at this time, we saw hiring and more positive
sentiment in the U.S., but not in a significant way in Europe,"
Iannuzzi said. Now, momentum is growing in the U.S. as well as in
Europe and Asia, he said. Specifically, he said, growth in the U.K.
remains slower, but Germany is growing rapidly and the Netherlands
is picking up.
Monster struggled during the recession as companies around the
world cut staff and slashed their recruiting budgets. But the
company has seen its results improve lately, with revenue, bookings
and deferred revenue all growing year-over-year in both the third
and fourth quarters.
Monster acquired HotJobs from Yahoo Inc. (YHOO) last year and
struck a commercial traffic deal to provide career and job content
on the Yahoo homepage in the U.S. and Canada, which significantly
increased its U.S. customer base and talent pool.
However, a weak first-quarter revenue forecast in January sent
Monster's shares tumbling 25% in a single trading session, and they
have yet to fully rebound. The stock continues to be pressured by
concerns about the potential competitive threat from social
networking sites.
Iannuzzi said Thursday that Monster doesn't view social media as
a threat but as an opportunity.
"Over time you'll see Monster engage more and more and combine
the strength of social media with the strength of our other
products," he said, declining to offer specific details.
For the quarter ended March 31, Monster posted a profit of
$78,000, up from a loss of $24.2 million a year earlier. On a
per-share basis, the company broke even, compared with a year-ago
loss of 20 cents a share.
The latest results included a pre-tax adjustment of $9.5
million, primarily related to HotJobs integration costs. Excluding
items, Monster posted a profit of 5 cents a share, up from a loss
of 14 cents a share.
Revenue increased 23% to $264 million, excluding a $2.7 million
accounting adjustment related to the acquisition of HotJobs, which
it completed in August. Monster saw revenue rise in both its
Careers-North America segment and Careers-International segment, up
28% and 25%, respectively.
In January, Monster had forecast earnings per share of 1 cent to
4 cents on revenue of $254 million to $265 million.
Monster said its first-quarter bookings, which represent the
dollar value of contracts signed in the quarter and future revenue,
increased 24% to $272 million. In January, Monster had projected
bookings growth between 18% and 23%.
Monster's results come as data Thursday show the number of idled
U.S. workers filing new claims for unemployment benefits
unexpectedly jumped last week, the latest sign that the labor
market remains weak.
Iannuzzi noted that it's easy to get discouraged if you look at
it on a day-to-day basis, "but I think the overall direction of the
economy will be very positive."
-By Caitlin Nish, Dow Jones Newswires; 212-416-2076;
caitlin.nish@dowjones.com
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