Randstad reports 20 percent fall in 3Q net profit

AMSTERDAM, Netherlands - Dutch staffing company Randstad NV said Thursday third quarter profit fell 20 percent as fewer companies hired temps in the face of an economic downturn.

Net profit was 78.5 million euros ($101 million), down from 97.8 million in the same period a year ago. Sales jumped 86 percent to 4.47 billion euros ($5.77 billion) thanks to the company's acquisition of rival Vedior NV in May.

Randstad bought Vedior for 3.51 billion euro ($4.53 billion) in cash and shares to create the world's second largest staffing company by sales, behind Adecco SA of Switzerland and ahead of Manpower Inc. of Milwaukee, Wisconsin.

Randstad said that, comparing like-for-like operations, sales were down 3 percent and operating profits down 4 percent.

Shares fell 6.6 percent to 15.65 euros ($20.22) in early trading in Amsterdam.

"In September ... revenue per working day decreased about 6 percent," the company said. "In the first weeks of October, the volume contraction is a few percent larger than in September."

It said it expected 20 to 30 million euros ($26-39 million) worth of restructuring and other charges in the fourth quarter.

"Randstad clearly indicates that the market is decelerating at a very fast pace," said analyst Paul Lissen of Petercam Securities in a note on the earnings. "The third quarter results show that they held up well, but the real stress test still has to begin."

He added that Randstad had an "extra handicap" because it is still integrating Vedior, and repeated a "Hold" advice on shares.

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