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Monster Worldwide Q1 Earnings

Published 05/08/2015, 03:29 AM
Updated 07/09/2023, 06:31 AM

Monster Worldwide (NYSE:MWW) reported earnings of 3 cents per share (including stock-based compensation but excluding one-time items) in the first quarter of 2015, which came in line with the Zacks Consensus Estimate.

The company posted GAAP earnings per share of 9 cents, compared with the year-ago figure of 2 cents per share.

Revenue Details

Quarterly revenues of $183.7 million missed the Zacks Consensus Estimate of $187 million and declined 7% year over year. On a year-over-year basis, results were impacted by unfavorable currency translation.

In the quarter, the company realigned its segments. The Internet Advertising & Fees segment has now been combined with the Careers – North America segment.

Quarterly revenues from Careers – North America were $122.4 million, down 4% year over year. Revenues in the Careers – International segment were $61.3 million, down 13% on a year-over-year basis.

Margin

Monster reported non-GAAP operating expenses of $168 million, down 8% year over year. The company reported adjusted EBITDA of $27 million and adjusted EBITDA margin of 15%, which increased 130 basis points.

Balance Sheet & Cash Flow

Monster exited the quarter with $110.2 million in cash and cash equivalents, compared with $94.3 million as on Dec 31, 2014. Cash flow increased 40% year over year to $26.8 million. Free cash flow was $18.8 million. Deferred revenues were $303.5 million compared with $300.7 million as on Dec 31, 2014.

Outlook

For second-quarter 2015, the company expects non-GAAP earnings per share from continuing operations in the range of 7 to 11 cents, excluding $4 to $5 million of stock-based compensation, $1.2 million of non-cash debt discount amortization related to the convertible debt and restructuring charges related to its Reallocate to Accelerate program.

The company expects to end 2015 with fourth-quarter 2015 EBITDA margin in the range of 18–22%.

Our Take

Monster’s re-branding process is expected to boost its overall growth over the long term. The company has already outlined a strategy to completely refurbish its platform and business model to enhance the experience of recruiters, employers and job seekers. Monster continues to diversify its customer base. It targets the enterprise market or those businesses that are among the top 1,500 organizations operating on a global basis.

However, the macroeconomic outlook remains uncertain, causing customers to become conservative and thereby restrict their hiring budget. Further, competition has intensified over the last few years in the online employment market, which, in our view, has resulted in Monster losing some market share to companies such as Naukri (Info Edge) and Hewitt Associates, among others. The barriers to entry into the Internet businesses are relatively low. Many of the cutting-edge recruiters have reduced their use of job boards in favor of alternative social media sites, such as LinkedIn (NYSE:LNKD) and Facebook (NASDAQ:FB), which have further dented profitability.

Monster currently has a Zacks Rank #3 (Hold).

A better-ranked stock in the same space is Lghtntbx Hld Adr (NYSE:LITB) having a Zacks Rank #2 (Buy).

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