Kelly Services Fourth Quarter Earnings Sneak Peek

Kelly Services, Inc. (NASDAQ:KELYA) will unveil its latest earnings tomorrow, Thursday, January 31, 2013. Kelly Services is a global workforce solutions provider operating in all major markets throughout the world. It assigns professional and technical employees in the fields of creative services, education, legal, and health care.

Kelly Services, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 33 cents per share, a decline of 48.4% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 41 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 33 cents during the last month. For the year, analysts are projecting profit of $1.37 per share, a decline of 23.9% from last year.

Past Earnings Performance: Last quarter, the company beat estimates by 9 cents, coming in at net income of 43 cents a share versus the estimate of profit of 34 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the third quarter, profit fell 15.7% to $16.6 million (43 cents a share) from $19.7 million (52 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 3.9% to $1.35 billion from $1.41 billion.

Here’s how Kelly Services traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

kelya

Wall St. Revenue Expectations: Analysts predict a decline of 2.9% in revenue from the year-earlier quarter to $1.36 billion.

Analyst Ratings: Among a limited number of analysts, two rate it as a buy, none rate it as a sell and one rate it a hold to give indications of a bullish outlook.

Key Stats:

After experiencing income drops the past two quarters, the company is hoping to use this earnings announcement to rebound. Net income dropped 20.2% in the second quarter and then again in the third quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 2.8% in the second quarter and dropped again in the third quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.64 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.63 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 4.3% to $1.19 billion while liabilities rose by 3.7% to $724.1 million.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)