51job Q3 Profit Rises 4% On Revenue Growth; Guides Q4 Above View

(RTTNews) - Chinese integrated human resource services company 51job, Inc. (JOBS) reported Wednesday a profit for the third quarter that grew four percent from last year, reflecting double-digit revenue growth amid improved hiring. The company also provided earnings and revenue outlook for the fourth quarter of fiscal 2013.

"Our increased investments in sales and marketing are generating meaningful returns with the pace of customer acquisition accelerating, which not only strengthens our online market leadership but also positions us for greater cross-selling opportunities in our other HR services," President and CEO Rick Yan said in a statement.

The Shanghai, China-based company reported net income of 117.35 million yuan or $19.18 million for the third quarter, up 4.0 percent from 112.85 million yuan in the prior-year quarter. Earnings per share grew to 1.95 yuan or $0.32 from 1.91 yuan a year earlier.

On American Depository share basis, earnings increased to 3.90 yuan or $0.64 from 3.82 yuan last year.

Excluding items, adjusted net income for the quarter was 137.03 million yuan or $22.39 million, compared to 126.26 million yuan in the year-ago quarter. Adjusted earnings per share was 2.28 yuan or $0.37, compared to 2.13 yuan a year earlier.

On American Depository share basis, adjusted earnings was 4.56 yuan or $0.75, compared to 4.27 yuan last year.

Total revenues for the quarter grew 12.3 percent to 419.60 million yuan or $68.56 million from 373.70 million yuan in the same quarter last year.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.64 per ADS, on revenue of $64.40 million for the quarter. Analysts' estimates typically exclude special items.

The company noted that it continued to observe solid market demand for its recruitment services in the third quarter as employers stayed active in their hiring activities.

Online recruitment services revenues increased 15.4 percent, as unique employers increased 26.3 percent from last year, Meanwhile, average revenue per unique employer decreased 8.6 percent, due to the addition of new customers who generally purchase introductory, lower priced services.

Other human resource related revenues grew 20.1 percent, while print advertising revenues dropped 58.8 percent from last year.

Operating margin contracted 430 basis points to 31.7 percent from last year as operating expenses as a percentage of net revenues increased 410 basis points and gross margin dropped 10 basis points.

The company noted that it discontinued the publication of 51job Weekly in Nanjing in August 2013, but continues to maintain its facilities and all other operations in the city.

Looking ahead to the fourth quarter, the company projects adjusted earnings in a range of 2.50 to 2.65 yuan per share or $0.82 to $0.87 per ADS, on projected revenues between 445 million yuan and 460 million yuan, or $72.7 million and $75.2 million.

Street is currently looking for earnings $0.70 per ADS on revenues of $70.40 million for the fourth quarter.

"We remain focused on the ongoing execution of our strategic initiatives to realize and monetize the large potential of the HR services industry in China for our shareholders," Yan added.

JOBS closed Wednesday's regular trading session at $78.01, up $1.96 or 2.58% on a volume of 48,271 million shares.