Adecco, the world's largest staffing company, missed forecasts with a second-quarter loss as one-off charges weighed, and said it was buying the UK's Spring Group to boost its professional staffing business.
The group made a loss of 147 million euros after impairment charges of 192 million euros on goodwill and intangible assets, whereas analysts had on average been expecting a profit of 29 million euros.
Revenue slipped 31 percent to 3.6 billion, largely in line with estimates, as firms across the world slashed their workforces to offset the fallout from the economic slump.
Looking ahead, management anticipates no material pick-up of business activities and has therefore initiated further restructuring measures., Adecco said in a statement.
Adecco's shares were indicated to open down 3.7 percent, premarket data provided by bank Clariden Leu showed.
Adecco, which has already shut branches and cut jobs to protect its profitability, said it expected to incur around 40 million euros of restructuring costs in the second half of 2009 for various countries.
Its a bit of a mixed bag. Sales and gross profit were disappointing, but cost control was good. The outlook is nothing special, said Fortis analyst Teun Teeuwisse.
Adecco said its selling, general and administrative expenses fell 21 percent on an adjusted basis and in constant currency, while the number of full-time equivalent employees was reduced by 19 percent and the branch network was cut by 13 percent.
Rivals like Netherlands-based USG People and Britain's Hays
and Michael Page have also cut jobs to preserve margins, which are coming under pressure due to weak sales.
Adecco also said on Tuesday it would pay 62 pence in cash per share for Britain's Spring Group, or a total consideration of 108 million pounds ($180 million).
With this transaction Adecco will strengthen its position in the fragmented UK market and further increase its professional staffing exposure, Adecco said.
Spring Group had sales of 517 million pounds in 2008.
The acquisition seems like a reasonable one. They have pretty low margins, but they are paying a pretty low price for it, Teeuwisse said.
Adecco failed last year in its bid to buy Michael Page, which would have boosted its presence in the professional market.
(Editing by Greg Mahlich)