Manpower 2Q profit tops estimate but outlook weak

But its shares tumbled 15 percent as the staffing company issued a weak third-quarter outlook amid the slowing global economy.

The Milwaukee-based recruitment firm said second-quarter profit fell to $107.4 million, or $1.34 per share, compared to $160.4 million, or $1.86 per share, in the same period a year ago.

The company put an additional $50 million into a legal reserve fund related to a tax inquiry by French regulators, and took a related charge in the latest quarter of $14.8 million, or 18 cents per share. Excluding this item, Manpower earned $1.52 per share in the latest period.

Helped by the weak dollar, revenue rose 17 percent to $5.90 billion from $5.03 billion in the same period a year ago. But without the effect of the favorable currency comparison, revenue increased just 5 percent, the company said.

Analysts polled by Thomson Financial expected adjusted earnings of $1.50 per share on slightly higher revenue of $5.96 billion.

The company also forecast third-quarter earnings per share in a range of $1.45 to $1.49, below current analysts' estimates of $1.58 per share.

The lowered outlook was due to lingering softness in the French market, the company's largest revenue source, and continued stagnation in the U.S. market, chairman and chief executive Jeff Joerres said.

Shares fell $8.48, or 15.1 percent, to $47.65 in afternoon trading.

Goldman Sachs analyst David Feinberg reiterated his "Conviction Sell" rating on the stock, noting that June labor statistics saw a decline in temporary payrolls of 7 percent and 7.5 percent respectively from the U.S. and France.