Monster Turns a Profit, But Weather Hurts

Jan 28, 2011
This article is part of a series called Financial.

Bad weather and government budget dalliance underminded Monster’s hopes for a strong finish to 2010 and it’s giving the company a slow start this year.

Though Monster finished 2010 meeting Wall Street’s profit expectations of 6 cents a share, its revenue of $258.3 million was below the $262.5 million analysts estimated. For the year, Monster reported $919 million in revenue and a 7 cent a share loss.

In after-hours trading, Monster’s stock was down about 3.7 percent and selling at $20.60 a share.

While the numbers represent a”a significant improvement over last year,” CEO Sal Iannuzzi told the analysts and others on a conference call this afternoon that massive weather disruptions in Europe and the Northeast during the last weeks of December kept the revenue contract bookings at the low end of estimates.

He also said an unfavorable exchange rate cost the company $5 million on its overseas revenue.

Bookings, the contracts large employers sign for bulk job postings and resume searching, came in at $330 million for the fourth quarter. That’s 28 percent above those in the fourth quarter of 2009, certainly a strong indication of job growth expectations by the world’s employers. However, Monster had estimated bookings would grew by as much as 32 percent.

Iannuzzi also said budget issues at the federal level, while a much smaller share of the overall business, also hurt revenue in December, which is typically its busiest month for contract closings.

Still, he said that he expects improvement in revenue to continue and bookings to further strengthen. For the current quarter of 2011, Monster is estimating bookings to come in between $259 and $269 million, an 18-23 percent growth rate over 2010. Overall revenue is expected to see a similar percentage growth with Monster projecting a per share profit of one to four cents a share.

The weather continues to heavily impact a good part of the country. Several inches of snow fell across the Northeast in the last few days, preventing thousands of workers from getting to the office. That’s what happened the last weeks of December when the weather kept executives away from work and companies from signing new contracts and, to a lesser extent, from posting jobs.

Iannuzzi quipped about the current winter conditions there, as he discussed the impact of December’s snows on the company.

However, he pointedly and bluntly pronounced as false, news reports that social media recruiting is causing a drop in job board revenues. That Monster’s revenue and bookings came in at the bottom end of company projections, Iannuzzi said, was “not caused by any fundamental changes in our business.”

He later followed up that reference with a double-barreled blast at the “noise out there about companies using different technologies and not using Monster.”

Although a company spokesman told me in an email that the CEO “was refering to general media coverage hyping social media,” the Wall Street Journal ran a story most recently declaring “Many (companies) plan to scale back their use of online job boards” in favor of sourcing candidates themselves.

Clearly agitated about the direction of recent coverage, Iannuzzi hinted at an undeclared agenda behind some of the stories, which, he said, included comments from uninformed individuals.

One article — he didn’t mention any names or specifics — contained a claim that certain named companies had reduced their job board spend, presumably with Monster. Iannuzzi said the truth is that one of the companies actually increased its spending by 85 percent. He refuted another statement that claimed yet another reduction by another company. It, too, Iannuzzi said, had increased its job board spending.

“False statements are made,” he insisted, reopening the closed question and answer period to the Wall Street analysts. A move I’ve never seen before. There weren’t any on that issue.

However, in the next few days, I expect to be posting a series of Q &As with Iannuzzi. He extended an offer to answer a few questions. One of them was on the subject of the social media buzz and how it is affecting Monster.

CareerBuilder, a private company, says it will report its North American revenue next week. Dice reports its 4th quarter and 2010 numbers on Tuesday before the market opens.

This article is part of a series called Financial.
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