Monster is taking a battering on Wall Street today after the company missed the earnings expectations of the financial markets and warned it may just break even in the current quarter.
Monster’s stock price was down almost 20 percent at lunchtime in New York, a drop of $1.79 on the day. Trading below $10 for so long that Standard & Poors moved the company out of its S&P 500 stock basket in December, Monster’s price is now right at $7.19 a share.
The jobs advertising company, which yesterday laid off 400 employees, issued its fourth-quarter and full-year financials this morning before the markets opened. Despite growing revenue by almost 14 percent for the year, the company fell short in the final quarter. It earned 11 cents a share versus the 12 cents analysts were expecting. Monster’s revenue for the quarter also fell short, coming in at $250 million instead of the $259 million average estimate of Wall Street analysts.
Compared to 2010, Monster was profitable, earning 37 cents a share for the year (after allowances for one-time and similar expenses). In 2010 the company lost 7 cents a share.
Looking ahead, the company is not optimistic about where the job market is heading. Bookings (posting and search contracts) are expected to be down 6 to 10 percent from the 1st quarter of 2010. Part of the explanation for the decline is that there were strong signs of economic recovery at the beginning of 2011 leading employers to anticipate adding staff. But the economy sputtered, slowing hiring.
Now, with employers carefully monitoring headcount and with surveys suggesting that if hiring accelerates at all, it will be in the second half of the year, Monster says it expects its revenue will be lower this quarter than the year before. The outlook, says the company’s report, is for a 3 to 7 percent decline in revenue.
“First quarter earnings are expected to be in the range of break-even to $0.04 per share,” the company says.
However, from a purely employment view, posting and search revenue actually was up globally. While North American revenue (principally the U.S.) declined 2 percent in the last quarter, Monster’s international revenue grew by 8.3 percent. For the year, revenue from its international operations was up 23.3 percent, and is now approaching parity with North America.
The biggest revenue reduction came from Monster’s advertising income. Monster said earlier this year it would be getting out of the advertising business, so the decline here was to be expected. For the fourth quarter, Monster’s advertising revenue was $21.3 million, a 34 percent reduction from the year before.
The layoff of about 7 percent of its 5,700 employee workforce is expected to save about $100 million annually.
Said Sal Iannuzzi, chairman, president and CEO, “We are taking difficult but necessary steps to implement cost savings initiatives that will provide us the flexibility to enhance our marketing and sales efforts to continue to improve long-term growth prospects and profitability.”
Next week, CareerBuilder will release its North American revenue for the fourth quarter and full year. The privately held company voluntarily releases only select data. LinkedIn, now the leading recruitment competitor to both Monster and CareerBuilder, will report its financial results on Feb. 9. Dice Holdings, operator of Dice.com and other niche boards, will report its results Feb. 2.
19 comments
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Michael Dsupin Jan 26, 2012 at 1:34 pm
The Job Boards are flooded with old, inactive postings. There are so many places that jobs are advertised that high charging sites are getting beat.
At Talener, we believe that without having a strong evangelist for the candidate, the chance of the candidate getting a job is greatly decreased.
Submitting resumes to job boards is now seen as a waste of time.
Jeff DickeyChasins Jan 26, 2012 at 3:10 pm
The real question: is this specific to Monster and ‘generalist’ boards (which I think it is), or is it indicative of an overall issue with job boards? Only time will tell.
Troy Grossman Jan 26, 2012 at 3:58 pm
One question to their CEO should be why in the world is Monster sending out $200 Logitech Harmony remote controls to their clients? That is a complete waste of money and I’m sure others like me can not take gifts greater than $10 so I sent it back.
Iris Johnson Jan 27, 2012 at 3:10 am
Yes, Troy. They indeed throw away 200 bucks for such a remote control. Goodness gracious.
Carol Bennett Jan 27, 2012 at 9:09 am
Troy, you have mistaken Monster.com with Monster Cables. Why on earth would a job board be sending out tv remotes?
Jeff DickeyChasins Jan 27, 2012 at 9:16 am
Thanks for that clarification, Carol. I was truly confused by Troy’s comment…
Troy Grossman Jan 27, 2012 at 10:44 am
I’ll clarify…it was Monster.com, not Monster Cable who sent me a big purple box with the remote control. Last year they sent a golf GPS (theme of search for candidates)which had to go back as well. Perhaps they don’t send these out to all of their clients. But I’ve received two expensive gifts from them. Have a great day everyone!!
Howard Adamsky Jan 27, 2012 at 1:37 pm
Not to be difficult but I must ask:
Does this mean that Monster will hire these folks back if their numbers improve?
I just wonder because that is what a layoff traditionally means.
Today, it is a mass firing of the disliked, older, less educated and folks that might be deemed difficult.
Love to see who was laid off and how individuals were selected. No vague nonsense here. Exactly how they were selected is what I have in mind.
Not required of course but seeing as Monster is, as least tangentially, in the employment biz, it would be great to have them show us how it is done.
Lead by example so to speak. Great chance for good PR, yes?
Just a thought.
Todd Raphael Jan 27, 2012 at 1:49 pm
I don’t think you’re being difficult — often companies lay people off and then hire back a couple years later and I often wonder if they include alumni in that re-hire list, and whether they go to them first. It seems that some companies do and some don’t. And for those that do, some laid-off alumni are on the “I’d love to get them back here list” and others are on the “I now realize we’re OK without them” list.
Keith Halperin Jan 27, 2012 at 1:59 pm
You can hire them back as contractors so you don’t have to pay their benefits anymore….
-kh
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