Manpower rises after foreign currency exchange ups 1Q profit

Manpower on Friday posted a 94-cents-per-share profit for the first quarter, above the 82-cent estimate expected by analysts polled by Thomson Financial.

Manpower generates most of its sales overseas, especially in France.

Baird analyst Mark Marcon said Manpower can boost near-term margins in well-developed markets, such as France and the U.S., by focusing on permanent placement services.

"Manpower plans to increase its percentage of revenue derived from high-margin permanent placement to 15 percent of total gross profit, up from the current 8 percent level," Marcon wrote in a client note.

Marcon also said emerging markets tend to have higher gross margin than more mature markets. Developing countries like China and India have big labor markets and represent a significant long-term opportunity, Marcon said.

Italy may also drive gains down the road, as Marcon said operating margins in the segment rose 187 basis points to 7.25 percent during the quarter.

Manpower Chairman and Chief Executive Jeffrey A. Joerres said Italy recorded local-currency sales growth of 15 percent in the first quarter.