Monster Lays Off 400, Misses on Revenue, Earnings

Monster is taking a battering on Wall Street today after the company missed the earnings expectations of the financial markets and warned it may just break even in the current quarter.

Monster’s stock price was down almost 20 percent at lunchtime in New York, a drop of $1.79 on the day. Trading below $10 for so long that Standard & Poors moved the company out of its S&P 500 stock basket in December, Monster’s price is now right at $7.19 a share.

The jobs advertising company, which yesterday laid off 400 employees, issued its fourth-quarter and full-year financials this morning before the markets opened. Despite growing revenue by almost 14 percent for the year, the company fell short in the final quarter. It earned 11 cents a share versus the 12 cents analysts were expecting. Monster’s revenue for the quarter also fell short, coming in at $250 million instead of the $259 million average estimate of Wall Street analysts.

Compared to 2010, Monster was profitable, earning 37 cents a share for the year (after allowances for one-time and similar expenses). In 2010 the company lost 7 cents a share.

Looking ahead, the company is not optimistic about where the job market is heading. Bookings (posting and search contracts) are expected to be down 6 to 10 percent from the 1st quarter of 2010. Part of the explanation for the decline is that there were strong signs of economic recovery at the beginning of 2011 leading employers to anticipate adding staff. But the economy sputtered, slowing hiring.

Now, with employers carefully monitoring headcount and with surveys suggesting that if hiring accelerates at all, it will be in the second half of the year, Monster says it expects its revenue will be lower this quarter than the year before. The outlook, says the company’s report, is for a 3 to 7 percent decline in revenue.

“First quarter earnings are expected to be in the range of break-even to $0.04 per share,” the company says.

However, from a purely employment view, posting and search revenue actually was up globally. While North American revenue (principally the U.S.) declined 2 percent in the last quarter, Monster’s international revenue grew by 8.3 percent. For the year, revenue from its international operations was up 23.3 percent, and is now approaching parity with North America.

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The biggest revenue reduction came from Monster’s advertising income. Monster said earlier this year it would be getting out of the advertising business, so the decline here was to be expected. For the fourth quarter, Monster’s advertising revenue was $21.3 million, a 34 percent reduction from the year before.

The layoff of about 7 percent of its 5,700 employee workforce is expected to save about $100 million annually.

Said Sal Iannuzzi, chairman, president and CEO, “We are taking difficult but necessary steps to implement cost savings initiatives that will provide us the flexibility to enhance our marketing and sales efforts to continue to improve long-term growth prospects and profitability.”

Next week, CareerBuilder will release its North American revenue for the fourth quarter and full year. The privately held company voluntarily releases only select data. LinkedIn, now the leading recruitment competitor to both Monster and CareerBuilder, will report its financial results on Feb. 9. Dice Holdings, operator of and other niche boards, will report its results Feb. 2.

John Zappe is the editor of and a contributing editor of John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.