Randstad Profit Beats Views, Expects Recovery To Continue

Dutch staffing group Randstad Holding NV (RAND.AE) Wednesday posted a higher-than-expected first-quarter net profit as a drop in revenue was more than offset by lower operating expenses, and it said that it expects its markets to improve in the second quarter.

"In a quarter that is historically the weakest of the year, we achieved a solid performance, thanks to cost control and careful attention to margins," said Chief Executive Ben Noteboom. He added that "our prospects for the near future are better than they have been for quite some time."

Randstad, the second-largest staffing agency by sales behind Switzerland's Adecco SA (ADEN.VX), said the industrial sector in Germany and the U.S. showed further signs of a recovery and that it expects its markets to improve in the second quarter. However, the company said that the Netherlands, its home market, was still lagging and that organic revenue fell 14% on the quarter.

The Diemen-based company swung to a net profit of EUR47.6 million in the first quarter of 2010 from a net loss of EUR52.6 million a year earlier when it booked over EUR60 million in restructuring charges and costs for the integration of Dutch rival Vedior NV, which it acquired in 2008. Analysts had expected a EUR23.5 million net profit for the period.

The bottom line benefited from a 20% drop in operating expenses to EUR499.6 million.

Revenue fell 1% to EUR3.04 billion from EUR3.1 billion, above analysts' forecasts of EUR3 billion.

However, during the quarter the revenue trend improved, with the rate swinging from a contraction of 5% in January to an increase of 4% in March. The company added that the improving trend continued into April.

Randstad shares closed Tuesday at EUR40.24. They have gained 15% this year compared to a 4% rise in the benchmark AEX, as investors hope that the early-cycle staffing sector will be the first to benefit from an economic recovery.

-By Maarten van Tartwijk, Dow Jones Newswires; +31 20 571 5201; maarten.vantartwijk@dowjones.com

Randstad NV (EU:RAND)
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