Current HR Marketplace Earnings and M&A News

HRmarketer lists the previous quarter's earnings from publicly traded HR and HR-related companies and all the latest M&A activity in the HR marketplace.

Archives: Fall/Winter 2007 | Summer 2007 | Spring 2007 | Fall 2006 | Winter 2006/2007

Fall/Winter 2007

Latest Earnings from Publicly Traded "HR" Companies:

• Automatic Data Processing Inc. (ADP): Reported that its fiscal first-quarter earnings rose as its employer and dealer services revenue rose. For the quarter that ended Sept. 30, ADP earned $297.4 million, or 55 cents per share, compared with $257.5 million, or 46 cents per share, in the year-ago quarter. The company's earnings from continuing operations totaled 45 cents per share, up from 39 cents per share in last year's first quarter. ADP's revenue rose 14 percent year over year to $1.99 billion from $1.75 billion.
  
  
• Aon Corp. (AOC): Reported its third-quarter profits rose 92 percent, while also announcing a global restructuring plan that will cost $360 million. Third-quarter net income increased to $204 million, or 64 cents per share, from $106 million, or 32 cents per share, during the same quarter a year ago. Aon's total revenue rose to $2.41 billion in the third quarter, an 11 percent increase from $2.17 billion during the comparable period a year ago. Analysts polled by Thomson Financial, on average, forecast earnings of 59 cents per share for the quarter on revenue of $2.26 billion.
  
  
• Administaff Inc. (ASF): Reported its third-quarter profit was nearly flat, as higher revenue was offset by increased expenses. Quarterly net income rose less than 1 percent to $12.2 million, or 45 cents per share, from $12.1 million, or 43 cents per share, during the prior-year quarter. Revenue rose 13 percent to $383.4 million, from $338.4 million last year, helped by a 9.7 percent increase in the average number of worksite employees paid per month and a 3.3 percent increase in revenue per worksite employee per month. Analysts polled by Thomson Financial expected a profit of 43 cents per share on revenue of $382.1 million.
  
  
• Convergys Corp. (CVG): Reported that third-quarter earnings fell slightly on higher expenses. Net income slid to $41.8 million, or 30 cents per share, from $45.2 million, or 32 cents per share, in the year-ago period. The result surpassed analyst estimates for 29 cents per share, according to Thomson Financial. Revenue edged higher to $703.7 million from $702.7 million last year, but fell short of the $717 million expected by Wall Street. Expenses were 1 percent higher to $640.7 million, which pushed operating income lower by 10 percent. The company reiterated its full-year earnings target of $1.20 per share, which is in line with Wall Street expectations. Convergys shares rose $1.03, or 6.1 percent, to $18.01 in morning trading.
  
  
• Equifax Inc. (EFX): Reported its net income shrank in its third quarter as a result of expenses from its purchase of Talx Corp. and a hefty year-ago gain. Income for the quarter ended Sept. 30 fell 16 percent to $67.9 million, or 48 cents per share, from $78.9 million, or 61 cents per share, in the year-ago quarter. The year-ago quarter included a gain of 10 cents per share from litigation and the reversal of some income tax reserves. Analysts polled by Thomson Financial expected earnings of 56 cents per share. Revenue increased 25 percent to $492.5 million from $394.6 million, with 18 percentage points attributable to Talx, which was acquired in May.
  
  
• Gevity HR Inc. (GVHR): Reported that its shares plunged after the human resources services company reported a drop in its third-quarter profit as the number of client employees served fell. The stock hit a four-year low of $6.33 earlier in the session and recovered slightly. Shares recently lost $2.94, or 31.2 percent, to $6.42 in afternoon trading. Third-quarter profit slid 74 percent to $2.5 million, or 10 cents per share, from $9.6 million, or 35 cents per share, a year earlier. Results in the most recent quarter include a charge of $1.9 million, or 5 cents per share, related to severance costs. Sales declined nearly 9 percent to $146.5 million from $160.6 million. Analysts surveyed by Thomson Financial expected earnings of 13 cents per share on revenue of $153.1 million.
  
  
• Hewitt Associates Inc. (HEW): Reported it swung to a fourth-quarter loss on jump in operating expenses. The provider of human-resource services reported a loss of $265.6 million, or $2.51 per share, compared with a profit of $23 million, or 21 cents per share, in the previous year. Analysts polled by Thomson Financial predicted a profit of 35 cents per share. Total operating expenses grew to $1.05 billion from $685.2 million. The current period's results included a $280 million goodwill impairment charge, a $36 million asset impairment charge mostly related to the human resources business process outsourcing business and other items. Quarterly revenue rose 6 percent to $768.2 million from $727.6 million a year ago, topping Wall Street's estimate of $749.6 million.
  
  
• Kenexa (KNXA): Reported its third-quarter profit and revenue rose by about two-thirds, but sales fell short of Wall Street's expectations. Net income for the three months ended Sept. 30 rose to $7.1 million, or 27 cents per share, compared with $4.2 million, or 20 cents per share, during the same period a year earlier. Excluding stock-based compensation costs, one-time consulting fees and other adjustments, the company said it earned 33 cents per share, compared with 24 cents per share last year. Analysts had been expecting earnings of 33 cents per share, on average, according to a survey by Thomson Financial. Those forecasts typically exclude one-time adjustments. Revenue rose to $46.8 million, from $28 million a year ago. That was short of analysts' projection of $49 million.
  
  
• Manpower Inc. (MAN): Reported its third-quarter earnings surged 31 percent, driven by revenue growth in Europe that helped offset declines in the United States. The results beat Wall Street expectations and the company forecast earnings for the fourth quarter above Wall Street estimates. Its shares rose more than 6 percent. Manpower earned $131.7 million, or $1.57 per share, in the three months ended Sept. 30 from $100.6 million, or $1.16 per share, in the same period a year ago. Quarterly revenue rose 15 percent to $5.30 billion, from $4.59 billion a year earlier. Analysts surveyed by Thomson Financial expected third-quarter earnings of $1.38 per share on revenue of $5.22 billion. The earnings estimates typically exclude one-time items.
  
  
• Monster Worldwide, Inc. (MNST): Reported it posted a third-quarter profit Wednesday amid strength in its international segment, reversing a year-ago loss that was weighed by discontinued operations. The company earned $33.3 million, or 25 cents per share, up from a loss of $83.8 million, or 64 cents per share, in the same period a year ago. Adjusted earnings were $45.7 million, or 35 cents per share, in the latest quarter. This excluded costs from the company's ongoing stock options investigation, restructuring expenses and the costs related to an August security breach of its resume database. Revenue rose 18 percent to $337.1 million from $285.9 million. Analysts, on average, were expecting a profit of 33 cents per share on sales of $336.6 million, according to a poll by Thomson Financial.
  
  
• Oracle (ORCL): Reported fiscal 2008 Q1 GAAP earnings per share were up 28% to $0.16, compared to the same quarter last year. First quarter total GAAP revenues were up 26% to $4.5 billion, while quarterly GAAP net income was up 25% to $840 million. Total GAAP software revenues were up 26% to $3.5 billion with GAAP new software license revenues up 35% to $1.1 billion. Database and middleware new license revenues were up 23% and applications new license revenues were up 65%. Services revenues were up 25% to $1.1 billion, compared to the same quarter last year.
  
  
• Paychex Inc. (PAYX): Reported its fiscal first-quarter profit increased 12 percent due to revenue increases in payroll and human resource services. Net income increased to $151.1 million, or 40 cents per share, from $135.1 million, or 35 cents per share, in the year-ago period. On average, analysts polled by Thomson Financial expected earnings of 39 cents per share for the quarter ended Aug. 31. Quarterly revenue increased 10 percent to $507.1 million from $459.4 million. Analysts forecast revenue of $511.7 million.
  
  
• Saba (SABA): Reported its fiscal first-quarter net loss narrowed slightly, as revenue from its OnDemand business increased. For the quarter ended Aug. 31, the company posted a net loss of $2.4 million, or 8 cents per share, compared with a loss of $2.6 million, or 9 cents per share, in the year-ago period. On an adjusted basis, the company posted a loss of $6,000, or about break-even per share. Revenue rose 10 percent to $25.5 million from $23.2 million. Analysts polled by Thomson Financial expected a net loss of a penny per share on revenue of $25.7 million.
  
  
• SAP AG (SAP): Reported its third-quarter profit rose 10 percent thanks to increased license sales. The German company, whose programs help companies do back-office work such as payroll, inventory management and accounting, earned 408 million euros ($579 million) in the July-September period, up from 370 million euros a year earlier. That was better than the 405 million euros ($575 million) analysts polled by Dow Jones Newswires had predicted. Revenue increased 9 percent to 2.42 billion euros ($3.44 billion) in the quarter from 2.21 billion euros last year. That was slightly less than the 2.44 billion euros ($3.46 billion) analysts had forecast. But SAP's revenue growth would have been 13 percent if not for the strengthening euro.
  
  
• Taleo Corp. (TLEO): Reported its total revenue for the third quarter was $33.7 million, representing an increase of 36% on a year-over-year basis. Application revenue for the third quarter was $27.4 million, an increase of 35% on a year-over-year basis. Services revenue for the third quarter was $6.3 million, an increase of 37% on a year-over-year basis, driven by milestone-based engagements for which milestones were met in the third quarter. Net income per fully diluted share was $0.08 for the third quarter of 2007 based on 28.8 million weighted average shares outstanding compared to net loss per fully diluted share of $(0.04) for the same period in 2006 based on 20.4 million weighted average shares outstanding.
  
  
• Ultimate Software (ULTI): Reported its third quarter of 2007 (quarter ended September 30, 2007) ended with total revenues of $37.8 million, an increase of 31% compared with the third quarter of 2006, and recurring revenues of $22.2 million, a 34% increase over the same period of the previous year. GAAP net income for the third quarter of 2007 was $2.4 million, or $0.09 per diluted share, versus GAAP net income of $1.3 million, or $0.05 per diluted share, for the third quarter of 2006. Excluding stock-based compensation and amortization of acquired intangibles, non-GAAP net income for the third quarter of 2007 was $5.0 million, or $0.18 per diluted share, compared with non-GAAP net income for the third quarter of 2006 of $2.7 million, or $0.10 per diluted share.
  
  
• Watson Wyatt Worldwide Inc. (WW): Reported its fiscal first-quarter earnings rose 39 percent on strong investment consulting revenue growth and solid performance in its benefits segment. Net income grew to $34.4 million, or 77 cents per share, from $24.8 million, or 56 cents per share, a year ago. The company said the weaker dollar added 2 cents per share to latest-quarter earnings. Revenue climbed 20 percent to $401.7 million from $336.0 million last year, although excluding acquisitions and the weaker dollar, revenue climbed just 9 percent. The results topped estimates of analysts surveyed by Thomson Financial, who expected profit of 63 cents per share on revenue of $389.5 million.
  
  
• Workstream Inc. (WSTM): Reported its fiscal 2008 first quarter results for the period ended August 31, 2007 included total revenue for the first quarter was $7.4 million compared to $6.9 million in the prior year's period, an increase of $0.5 million or 7%. EBITDA loss for the first quarter of fiscal 2008 was $(3.0) million, or $(0.06) per share, compared to an EBITDA loss of $(1.1) million, or $(0.02) per share, in the first quarter of fiscal 2007. The Company's net loss for the quarter ended August 31, 2007 was $(6.9) million, or $(0.13) per share, compared to a net loss of $(2.9) million, or $(0.06) per share, in last year's comparable quarter.
  
  

Latest M&A Activity in the HR marketplace:

• Adecco, the world leader in Human Resources (HR) services announced that the company has signed an agreement to purchase 15.7% of registered share capital of DIS AG for a total consideration of EUR 219 million. Adecco now holds 98.4% of registered share capital of DIS AG and intends to initiate a squeeze-out procedure.
  
  
• Deloitte announced it has acquired the assets of Xcelicor, Inc., a leading North American Oracle Human Capital Management (HCM) systems integrator. The acquisition increases Deloitte's Human Capital services capability by more than 90 total employees, including more than 80 consulting professionals. It also reinforces Deloitte's position as a leading provider of Oracle human capital technology-related consulting services to the market.
  
  
• Drinker Biddle announced that it would acquire 13-attorney employment law boutique Connelly Sheehan Harris in Chicago, effective Feb. 1, 2008. The combination will continue the firm's growth in the area of human resource law, particularly on the litigation side.
  
  
• Exact Software has successfully completed the strategic acquisition of leading CPM Software provider Longview Solutions to enrich Exact's solution portfolio beyond traditional ERP. Established in 1984, Exact Software provides business software solutions in such areas as human resource management (HRM),
  
  
• GP Investments Ltd., Latin America's largest private-equity firm, agreed to buy four human resources companies in Brazil for 100 million reais ($55.2 million).
  
  
• Human Resource Advantage LLC has merged with another Louisville firm, HR Affiliates. The combined company operates under the name HR Affiliates Outsourcing and Consulting Services. HR Affiliates Outsourcing and Consulting Services has offices in Louisville, Lexington and Elizabethtown, Ky., and in New Albany, Ind.
  
  
• IBM announced that it has signed an agreement to acquire Cognos. Cognos is one of the largest providers of business intelligence and performance management solutions.
  
  
• Kronos Inc., a privately held company that provides software that large companies use to manage recruiting, hiring, and retention functions, acquired Deploy Solutions Inc. Kronos said the Deploy acquisition will add strengths in Kronos' existing target markets such as retail and dining.
  
  
• Mangrove Employer Services, a leading provider of Human Resource Management, Payroll and Benefits Administration services, announced the acquisition of Access1Source Nevada, a web-based Payroll and Human Resource Service Bureau located in Las Vegas, Nevada.
  
  
• Mercer, the global leader for human resource consulting, outsourcing and investment services, has signed an agreement to acquire Höfer Vorsorge-Management, one of Germany's leading actuarial and retirement consulting firms.
  
  
• NuView Systems, developer of the award winning NuViewHR(R) product suite, announced that is has completed the acquisition of Cort Software, a leading provider of enterprise payroll systems and developer of Cort HCM and Cort 1099R. This was done in a direct response to the growing trend of shifting human resource (HR) and payroll functions from disjointed point solutions to a fully integrated application.
  
  
• Paychex, Inc., a leading provider of payroll and human resource services, announced the acquisition of Hawthorne Benefit Technologies, Inc. and BeneTrac, its powerful online employee benefits management and administration system. Hawthorne, founded in 1999, is based in San Diego, California and now operates as Paychex Benefit Technologies, Inc., a wholly-owned subsidiary of Paychex.
  
  
• Salary.com entered into a definitive agreement to acquire the assets of ITG Competency Group, LLC. In addition, Salary.com has licensed the complete competency library of Schoonover Associates, Inc. With these transactions, Salary.com will own an extensive competency library comprising over 2,000 job competencies and will offer consulting services for competency model development and support partnership re-selling arrangements.
  
  
• Watson Wyatt Worldwide Inc. continues to expand its European presence. The Arlington-based financial and human resources consulting firm has agreed to acquire Swedish consulting group Oakbridge Consulting Group. The financial terms of the deal were not disclosed. Stockholm-based Oakbridge Consulting, founded three years ago by a former Watson Wyatt consultant Magnus Drogell, consults about 400 companies' human resource departments with pay strategy, salary structures, job evaluation and employment surveys.