Go ahead and cheer. Do a happy dance. Stocks were up today as Wall Street reacted to Treasury Secretary Timothy Geithner’s plan to breath life back into the U.S. banking system.
The stock of most publicly held HR firms was helped by the 497 point surge in the Dow and equally significant jumps in the other indices. Whether technology provider, staffing firm, or job board, the effect was felt equally. Monster, for instance, saw its stock jump 15.1 percent, besting by more than twice the Dow’s 6.8 percent rise. Closing at $8.45 a share, it’s still off its 52 week high of $29.
Staffing firm Manpower, which hit a high of $70.71 last year, closed up 10.7 percent to close at $31 a share.
Kenexa, Lawson, SuccessFactors, Taleo and Workstream — all HR technology vendors — were up ranging from 17.5 percent for Kenexa and Workstream’s 16 percent to Taleo’s 10.2 percent rise. The up-market’s coattails may have been muted in Taleo’s case by its announcement today that the accounting review begun last year would result in the restatement of some $18 million in consulting revenue.
The company has been issuing periodic updates about the review, so its conclusion wasn’t unexpected. In addition to restating (essentially making accounting adjustments), the end of the review will allow the company to file its tardy financial reports and resolve its threatened delisting by the NASDAQ, where the stock is traded.
Monday, after the market closed its frenetic day, Taleo officials said the revenue recognition review had concluded and the company will restate revenue going back as far as 2003. It will also be filing its delayed reports by the end of April.
What it means is that about $18 million of revenue reported between 2003 and 2007 will be reassigned, resulting in relatively minor reductions in revenue reported during each of those years. Less than 4 percent of that $18 million wil be spread over the company’s financial quarters beginning from July 1, 2008, onward.
The company explained the adjustments in a press release saying: “Historically, when application services and consulting services were sold together, the company recognized consulting services revenue as the services were delivered. Now, in similar arrangements, the company’s consulting services revenue will be recognized ratably over the term of the application services agreement, typically three years.”
To put the dollars in perspective, Taleo said that over the period involved “a total of approximately $85 million in consulting revenue and $378 million of application revenue was recognized.”