Kelly Services Inc. Earnings Cheat Sheet: Profit Rises

Kelly Services, Inc. (NASDAQ:KELYA) posted higher net income in the third quarter compared with a year-earlier period. 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.

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Kelly Services Earnings Cheat Sheet for the Third Quarter

Results: Net income for Kelly Services, Inc. rose to $19.7 million (52 cents per share) vs. $9.6 million (26 cents per share) a year earlier. This is a twofold increase from the year earlier quarter.

Revenue: Rose 9% to $1.4 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: KELYA beat the mean analyst estimate of 43 cents per share. It fell short of the average revenue estimate of $1.43 billion.

Quoting Management: Carl T. Camden, President and Chief Executive Officer, said, “We are seeing continued demand for temporary staffing services ahead of last year. Today’s employers are seeking greater workforce flexibility as they adapt to new market realities, and Kelly(NYSE:R) is in an excellent position to provide customized solutions – particularly through outsourcing and consulting, and highly skilled professional and technical services. When coupled with our leaner cost structure, that business mix has the potential to accelerate profit growth going forward.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 29 cents in the second quarter, by 3 cents in the first quarter, and by 16 cents in the fourth quarter of the last fiscal year.

Gross margin shrank 0.5 percentage point to 15.6%. The contraction appeared to be driven by increased costs, which rose 9.6% from the year earlier quarter while revenue rose 9%.

Revenue has risen the past four quarters. Revenue increased 16.2% to $1.41 billion in the second quarter. The figure rose 18.5% in the first quarter from the year earlier and climbed 11% in the fourth quarter of the last fiscal year from the year-ago quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 45 cents per share, up from 43 cents ninety days ago. The average estimate for the fiscal year is $1.54 per share, a rise from $1.19 ninety days ago.

Competitors to Watch: SFN Group Inc (NYSE:SFN), Barrett Business Services, Inc. (NASDAQ:BBSI), Robert Half Intl. Inc. (NYSE:RHI), Kforce Inc. (NASDAQ:KFRC), TrueBlue, Inc. (NYSE:TBI), Monster Worldwide (NYSE:MWW), ManpowerGroup (NYSE:MAN), LinkedIn (NYSE:LNKD), Volt Information Sciences, Inc. (NYSE:VOL), and On Assignment, Inc. (NASDAQ:ASGN).

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