Monster: Grim earnings, revenue, sale prospects

Posted by on Feb 7, 2013 in Articles, Financial results, Recruitment

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Updated with details of earnings call, stock movement

It’s not a pretty picture at Monster Worldwide, parent of Monster.com. The company has been for sale for almost a year and there are no apparent prospects as buyers. And revenues and earnings fell off a cliff last year.

As a result of the company’s earnings release and management conference call analyzing its changes, the stock (NYSE: MWW) dropped sharply today, from an opening at $5.85 per share to as low as $5.01 per share before rebounding slightly more than half-way to $5.45 shortly before the close of trading.

CEO Sal Iannuzzi painted a grim picture of the “strategic alternatives” option — i.e., a sale or similar transaction. He said the company has talked with both strategic and financial investors, but while “the process continues … it is going very slowly and we are not able to anticipate when or whether our board will have a concrete transaction to consider. … We are spending little additional management or financial resource in pursuit of that alternative.”

Translation: No one wants to buy us, at least not now, and we’ve pretty much given up. But, he added, “We are, of course, ready to respond quickly if an opportunity arises.”

The company reported bleak earnings, both for Q4 and for the full year 2012. Revenue for the year was down more than 10 percent, from $994 million in 2011 to $890 in 2012, and earnings swung from net income of $54 million or 43 cents per share in 2011 to a loss of $259 million, $2.27 per share.

The company said it has eliminated $130 million in costs on an annual basis as a result of eliminating its operations in China, Latin America and Turkey, as well as significant expense reductions in the U.S. With the elimination of those international operations, though, came a reduction of more than $50 million in annual revenue.

“Consolidated bookings,” or new ad and listings sales, were down 13 percent during Q4 year-over-year — off 30 percent in Europe and off more than 3 percent in North America.

Iannuzzi’s positive spin?

“During the fourth quarter, we continued to maintain a meaningful traffic lead over our top competitor” — i.e., CareerBuilder — “in the United States,” he said. “Even more importantly, our clients are seeing a significant increase in the number of replies they get. This superior traffic in applied positions, combined with our superior search capability, means our core value proposition is better than ever.”

CareerBuilder on Monday reported its quarterly and annual revenues. (The AIM Group article, available only to clients, is here.) North America quarterly revenue and annual revenue were both up 5 percent year-over-year, although Q4 revenue slipped slightly compared to Q3 revenue.

For a transcript of the Monster earnings call, see Seeking Alpha. For the Monster earnings release, click here. 

 

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Written by Jim Townsend

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