Monster Sells China Job Board and Says No Company Sale in Sight

Feb 7, 2013
This article is part of a series called Financial.

Monster LogoIn a financial conference call this morning that was largely devoid of much optimism, Monster officials announced the sale of most of its stake in ChinaHR, and said the company had pulled out of Brazil, Mexico, and Turkey.

It’s fourth-quarter revenues, also reported this morning, of $211.2 was nearly on target with analysts’ average estimate of $212 million, while earnings per share, after adjusting for expenses associated with the company’s restructuring and sales, were 8 cents, in line with estimates.

For the year, Monster earned .38 cents a share, after adjustments. Without the adjustments, Monster lost 66 cents for the quarter, and $2.27 for the year.

By comparison, Dice Holdings Inc., owner of several niche job boards and technology networking sites, reported last week it earned 15 cents a share, a penny better than analysts expected. But profit was down 14% over the fourth quarter in 2011. Revenue, however, grew 11% to $52.7 million on the strength of acquisitions the company has been making.

CareerBuilder, which is privately held by a group of newspaper publishers lead by Gannett, said its North American revenue was up 5.1% to $164 million. That’s the only number the company provides publicly.

LinkedIn will report its fourth quarter and full-year financials this afternoon.

The ChinaHR sale to Ireland’s Saongroup, owner of IrishJobs.IE, brought the company $30 million for a 90% share. Monster retains 10%. It paid more than $225 million for ChinaHR in a series of transactions dating back to 2005.

However, Monster officials said divesting the money-losing ChinaHR, and closing the other operations, while reducing the company’s annual revenue by $50 million, would save $85 million in expenses, netting about $35 million to the bottom line.

Reentering some of those markets remains a possibility, Chairman, CEO, and President Sal Iannuzzi told analysts during the call. It’s “not impossible,” he said, “at some point in the future we go back to those markets.”

Company officials indicated months ago they were putting ChinaHR up for sale. One of the three or four leading job boards in China, it has tough competition there in a crowded especially against 51Job and Zhaopin. Saongroup already does business in China. Acquiring ChinaHR “leaves us well-positioned to accelerate our growth in the Chinese market,” Saongroup’s CEO Ciaran McCooey told the Irish Examiner.

Iannuzzi told analysts that selling or closing parts of the Monster operation had been discussed internally, but until the last few months officials held off while pursuing a sale of all of Monster. The decision to go forward was made after it become apparent that they didn’t interest potential buyers as much as was initially thought.

Meanwhile, Iannuzzi gave indications that interest in a sale of the company may be waning. While insisting, “We are having conversations,” Iannuzzi said the company as a whole is devoting far less time to a potential sale. What’s more, he said, these conversations “may or may not lead to a transaction.”

“We covered the waterfront,” Iannuzzi said in response to a question about the sale. Though it was “an extremely robust process,” he explained, it has been “certainly slower than I would have anticipated.”

“We’ll see what the future brings us,” he added.

It’s the first time since announcing last year that Monster would “pursue strategic alternatives” — Wall Street-speak for a sale — that Iannuzzi or other company executives offered much detail about the process. While in the end it wasn’t a lot, taken in light of the sale of ChinaHR, layoffs, and cutbacks in the U.S. and abroad, and a focus during the call on selling products beyond traditional job board services, the statements suggest the company may be moving to reassert itself and broaden its marketing in Europe and North America, especially in its government sales and technology services.

After the opening of trading, Monster’s stock price dropped more than 10%. It was selling at $5.23 at late morning in New York.

This article is part of a series called Financial.
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