Stock Tumbles on Monster’s Report of Loss

Apr 29, 2010
This article is part of a series called Financial.

The recession continues to take a toll on job boards, with Monster the latest and largest of the publicly held recruitment advertising firms to report a loss on declining revenue.

Monster said it lost $24.2 million on sales of $215.3 for the first quarter of this year. That compares to a loss last year for the same quarter of $10.3 million on revenue of $254.4 million.

That translates into a 20-cent-a-share loss, 2 cents more than the most pessimistic Wall Street estimate. Analysts, according to Yahoo Finance, had been expecting a loss in the range of 12 to 18 cents, with an average of 16 cents a share.

CareerBuilder, a privately owned company, voluntarily reports only its North American revenue, which, it said today, was $132 million, a 6.4 percent decline from the $141 million it reported for the same quarter last year.

Dice, the other major publicly held job board company, reported Wednesday that it earned 5 cents a share on revenue of $26.8 million. In 2009, it had revenue of $29.6 million and earnings of 6 cents a share for the first quarter. Wall Street bid up its stock, which closed today at $9.31, up $1.00 since Tuesday.

Monster’s financial  report sent its share price tumbling in after-hours trading. An hour after the release of the numbers, even as Chairman and CEO Sal Iannuzzi was beginning to explain the numbers during a call with analysts, the stock had dropped 10 percent. It closed Thursday at $17.89 a share.

Despite the loss, the numbers did show signs of improvement. As CFO Tim Yates pointed out, the revenue for the quarter showed the smallest decline in more than a year, and it was higher than the company had expected.

Yates and especially Iannuzzi pointed to bookings (contract sales) as a sign of growing strength for Monster. The $219 million in contracts booked during the first quarter was a 17 percent increase over the same quarter the year before, the first positive growth for a quarter in 12 months.

Iannuzzi credited the improving economy and the 6 Sense technology for the boost in bookings. “Product innovation is driving growth,” the CEO said early on in the conference call. Later, responding to a question, he specifically credited Power Resume Search, a premium resume search using the 6 Sense technology, for helping to increase sales.

“Once customers understand the value proposition,” he told analysts who had asked about acceptance of the 30 percent premium Monster charges for Power Resume Search, “They are paying it.”

He also credited the 6 Sense search technology (used by recruiters to search resumes and job seekers to search listings) with improving Monster’s market share. Monster, Iannuzzi said, has “successfully reversed the negative trend” in the U.S. At another point he said the company commanded over 30 percent market share. “We are confident that we are winning,” he said, without referring to CareerBuilder, Monster’s No. 1 nemesis.

CareerBuilder’s North American revenue, almost all of it coming from the U.S, was $35 million ahead of Monster’s. That gives it a pretty good revenue lead, which probably also makes it fairly strong in market share. However, when Monster completes the acquisition of HotJobs from Yahoo in the third quarter, it could move the company back into the top spot.

Still, Monster, like the U.S. economy as a whole, is not out of the woods. The company told analysts it expected to lose money in the current quarter and to lose between 12 cents and 20 cents per share for the year.

CareerBuilder doesn’t report profitability.

This article is part of a series called Financial.
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