Adecco 3Q Net Profit -46%; US Staffing Market Shows Improvement
November 05 2009 - 1:54AM
Dow Jones News
Adecco SA (ADEN.VX) Thursday reported a better-than-expected 46%
drop in third quarter profit and said that staffing markets in the
U.S., which have been hard hit during the recession, have started
to improve.
The Zurich-based employment firm said net profit for the
three-month period to the end of September fell to EUR90 million
from EUR168 million a year ago. That beat analyst calls for EUR50
million, as the company benefitted from cost-cutting and an
unexpected improvement in market conditions in the U.S. and
France.
While sales still fell 27% to $3.72 billion from EUR5.10 billion
during the third quarter, the decline was less steep than in
previous quarters, when revenues dropped more than 30% as weak job
markets in the U.S. and France hit Adecco's top line.
"Market conditions have improved during the third quarter,
especially in general staffing, and we have seen a gradual
improvement of the revenue trend," said Chief Executive Patrick De
Maeseneire.
The company, which recently bough U.S.-based peer MPS Group Inc
for $1.3 billion, said it would continue to reduce costs as pricing
still remained under pressure as many companies are still trying to
avoid hiring staff.
Adecco's competitors, such as Manpower Inc (MAN) and Randstad
Holding NV (RAND.AE), have already warned that margins would stay
depressed.
Despite the market improvement in France and the U.S., the
company's key market, employment trends in Germany remained weak,
with sales falling more than 30%. Likewise, hiring activity in the
U.K., which is still mired in recession, was weak.
Company Web Site: http://www.adecco.com
-By Goran Mijuk, Dow Jones Newswires, +41 43 443 80 47;
goran.mijuk@dowjones.com
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