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Adecco Advances to Record High on Earnings

March 12 (Bloomberg) -- Adecco SA, the world’s largest provider of temporary workers, climbed to its highest level in more than six years after reporting earnings that beat analysts’ estimates, driven by hiring in Germany, Austria and Italy.

Shares of the Glattbrugg, Switzerland-based company rose 5.5 percent to 79.30 swiss francs at 2:03 p.m. in Zurich, after earlier rising as much 5.7 percent to 79.45 swiss francs, the highest intraday level since September 2007.

Net income jumped to 174 million euros ($241 million), compared with 35 million euros, a year earlier, the company said in a statement today, Full-year profit rose 48 percent to 557 million euros, ahead of the 508.1 million-euro average analyst estimate, according to data compiled by Bloomberg.

Adecco Chief Executive Officer Patrick De Maeseneire has navigated the company through Europe’s slump since he took the reins in 2009. Revenue gains in Europe in the fourth quarter helped Adecco counter a weaker first quarter. Sales in Germany and Austria, which makes up about 8 percent of revenue, rose 10 percent on a constant-currency basis.

“The positive thing about these results is that the beat is due to an improving top-line, not just better cost control with Adecco seemingly taking share from the other major players,” Andrew Brooke, an analyst at RBC Capital Markets, said in a note today. Brooke has a positive rating on the stock.

‘Cautiously Optimistic’

France, Adecco’s biggest market with a share of revenue of 24 percent, remained flat but profitability improved, the company said.

“Last year began with much uncertainty, especially in Europe, but nonetheless we were cautiously optimistic,” De Maeseneire said in the statement. “The 2013 results confirmed our view, with a gradual improvement during the course of the year.”

Adecco beat competitors such as Randstad Holding NV and Manpower Inc. on revenue growth by “the widest gap in recent years,” Citigroup Inc. analyst Marc Van’T Sant wrote in a note. “This outperformance is driven by good growth” in France, North America and the U.K., he said.

The company posted fourth-quarter revenue of 4.98 billion euros, an increase of 4 percent on a constant currency basis.

Organic sales growth in the quarter was “solid” and “slightly ahead of its main peers,” Hans Pluijgers, an analyst at Kepler Cheuvreux, said in a note. He has a hold rating on the stock.

To contact the reporter on this story: Jan-Henrik Foerster in Zurich at jforster20@bloomberg.net

To contact the editors responsible for this story: Mariajose Vera at mvera1@bloomberg.net Ben Livesey, Robert Valpuesta

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