Kelly Services (KELYA) Misses Q1 EPS by 11c, Revenues Miss

Kelly Services (NASDAQ: KELYA) reported Q1 EPS of $0.20, $0.11 worse than the analyst estimate of $0.31. Revenue for the quarter came in at $1.26 billion versus the consensus estimate of $1.31 billion.

Financial Highlights

• Q1 revenue down 8.8%; 2.7% of the decline due to estimated impact of COVID-19 crisis
• Q1 operating earnings decline on $147.7 million non-cash goodwill impairment charge, partially offset by a gain on sale of headquarters buildings; operating earnings declined 46% on an adjusted basis
• Q1 loss per share of $3.91, compared to earnings of $0.56 last year; Q1 earnings per share on an adjusted basis of $0.20 compared to $0.45 last year

“Kelly began the year with signs of stabilization in our U.S. staffing business, and continued growth in our outcome and consulting businesses,” stated Quigley. “However, the sudden and dramatic disruption sparked by COVID-19 in mid-March was unlike anything we’ve seen in our nearly 75 years. Negative market reaction to the crisis, including declines in our share price, triggered a goodwill impairment charge in the quarter that had a significant impact on our reported results. While we continue to closely manage the financial impact of the pandemic, the non-cash impairment charge does not change our views, or confidence, in our ability to weather the COVID-19 crisis or to capitalize on opportunities when the crisis ends. We’re moving forward with our transformation into a specialty talent solutions provider by taking prudent, near-term measures to protect our financial flexibility, while preserving our ability to capture growth coming out of this crisis. And, of course, our top priority has been, and continues to be, the health and safety of our people.”

For earnings history and earnings-related data on Kelly Services (KELYA) click here.

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