MAN – Why Is Manpower (MAN) Up 9.2% Since Last Earnings Report?

It has been about a month since the last earnings report for ManpowerGroup (MAN Free Report) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Manpower due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

ManpowerGroup Beats On Q2 Earnings & Revenues Estimates

ManpowerGroup reported better-than-expected second-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.

Quarterly adjusted earnings of $2.02 per share beat the consensus mark by 68.2% and improved more than 100%. Revenues of $5.28 billion beat the consensus mark by 2%. The top line inched up 41% year over year on a reported basis and 31.3% on a constant-currency (cc) basis.

Segmental Revenues

Revenues from America totaled $1.04 million, up 24.8% year over year on a reported basis and 22.8% at cc. In the United States, revenues came in at $628.8 million, up 21.9% year over year. In the Other Americas subgroup, revenues of $415.5 million grew 29.6% on a reported basis and 24.3% at cc.

Revenues from Southern Europe were up 64.7% on a reported basis and 51% at cc to $2.42 billion. Revenues from France came in at $1.35 billion, up 83% on a reported basis and 67.3% at cc. Revenues from Italy amounted to $469.1 million, up 74.7% on a reported basis and 59.6% at cc. The Other Southern Europe sub segment generated revenues of $606.5 million, up 30.1% on a reported basis and 20.4% at cc.

Northern Europe revenues moved up 37.5% on a reported basis and 23.1% at cc to $1.19 billion.

APME revenues totaled $619.9 million, up 8.9% on a reported basis and 5.5% at cc.

Operating Performance

Gross profit in the quarter was $860.1 million, up 49.1% year over year on a reported basis and 0.5% at cc. Gross profit margin rose to 49.1% compared with 39.8% in the year-ago quarter.

The company incurred operating profit of $169.9 million against loss of $50 million in the year-ago quarter.

Balance Sheet and Cash Flow

ManpowerGroup, carrying a Zacks Rank #2 (Buy), exited the quarter with cash and cash equivalents balance of $1.46 billion compared with the prior quarter’s level of $1.52 billion. Long-term debt at the end of the quarter was $1.07 billion compared with $1.06 billion reported in the preceding quarter.

The company generated $54.5 million of cash from operating activities, while Capex was $11.9 million in the quarter.

Guidance

ManpowerGroup expects third-quarter 2021 earnings between $1.86 and $1.94 per share.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 9.5% due to these changes.

VGM Scores

At this time, Manpower has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Manpower has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.