Recruiter Randstad beats Q1 earnings estimates despite hiring slowdown
Reuters
Published Apr 25, 2023 06:48
Updated Apr 25, 2023 08:36
By Romolo Tosiani
(Reuters) -Dutch recruitment firm Randstad reported better-than-expected first-quarter core earnings on Tuesday, despite a slowdown in hiring by companies.
The performance of staffing firms is seen as a bellwether for broader economic activity as companies' appetite for hiring indicates confidence in the economy.
"So it's less hiring but still good activity," CEO Sander van 't Noordende told Reuters.
Van 't Noordende added the company saw a good performance in permanent employment in Europe but also in the U.S., despite that business being down it's still at a level that is beyond pre-pandemic."
The group's underlying earnings before interest, taxes and amortisation (EBITA) were down 9% at 266 million euros ($293.90 million), but above the 260 million euros forecast in a company-compiled consensus.
The "macro economic environment remained challenging across our markets, which translated into lower hiring activities from our clients," the firm said, adding that this trend continued into early-April.
Jefferies said in a note that organic revenue estimates could move down as comments on April, suggest a 5-6% organic revenue growth decline in the second quarter, below consensus for a 4% decline.
The stock was down 2.4% by 0706 GMT.
The company said organic revenue per working day declined by 4.2%, with North America down 10%, while Northern Europe slipped 6%. The Asia Pacific region was a bright spot with revenue up 4%.
Weakness in North America was mainly driven by an overall softening of demand in sectors such as manufacturing, transportation and distribution, along with administrative roles, Chief Financial Officer Jorge Vazquez told Reuters.
Peers PageGroup and Hays (LON:HAYS) flagged slower hiring due to weakness in the permanent recruitment market as employers were turning to interim hires to ride out market uncertainty amid a tough economic outlook.
"The economy is not in a recession, it's not in great shape either," Van 't Noordende said, adding the key question is whether the central banks will continue to raise interest rates.
Get The App
($1 = 0.9051 euros)
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.