Monster Stock Plummets On Prediction Of Slow Quarter

Feb 11, 2016
This article is part of a series called News & Trends.

Monster reported its year-end financial results this morning. The Recruitment revenue Q4 2015results were a mixed bag: Revenue was lower than expected, but earnings of 12 cents a share were right on target.

While not the kind of results any CEO wants to report, it wasn’t the $8 million gap in revenue that sent the already anemic stock crashing down 36 percent to close at $2.72. (Monster reported $159.2 million for the fourth quarter. Analysts were looking for $166.9 million.)

What did it was Monster’s forecast of a first quarter earnings per share between 6 and 10 cents, well below the 13 cents analysts were looking for.

In predicting a lower quarter, Monster joined LinkedIn, which last week saw its stock drop by almost half after forecasting earnings and revenue would be less than Wall Street was expecting. DHI Group, which publishes a number of niche career sites, including tech site, said it, too, was expecting lower first-quarter revenue than in 2015. Its stock price also declined, but only by a few percentage points. Analysts had already factored a slowdown into their expectations.

We don’t know what CareerBuilder is expecting this quarter. The company is privately owned. But the financial guidance coming  from the three publicly held U.S. headquartered companies suggests that employment may be slowing.

Federal Reserve Chairwoman Janet Yellen, testifying to Congress yesterday, didn’t go that far in discussing the country’s economic growth. But she was cautious about the near term.

“Financial conditions in the United States have recently become less supportive of growth,” she told the House Financial Services Committee. “These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market.”

Last week, SHRM’s LINE report, predicted a slow month for job growth. “In February,” the report says, “the hiring rate will fall slightly in manufacturing and will remain nearly unchanged in services compared with the previous year.”

The report also notes that recruiting will continue to get more difficult during the month; slightly for manufacturers, more for those in the service sector. Other SHRM reports, cited in the LINE report, found 38 percent of HR professionals had difficulty recruiting at all levels of their organizations, and 55 percent had difficulty recruiting highly skilled employees.

That would seem to be good news for job board operators, especially in light of the Talent Board’s report this week saying more employers are spending on postings and other services with the commercial sites, even if candidates themselves are more likely to job hunt on company sites.

Yet, Monster and DHI Group appear headed to a slower quarter than the year before. LinkedIn says it simply won’t grow as fast as it has or as Wall Street anticipated.

This article is part of a series called News & Trends.
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