Monster Worldwide Inc. (NYSE: MWW) has been getting hammered on Thursday following the release of the online recruitment firm’s second quarter earnings report which showed revenue fall 12% to $237 million compared to second quarter 2011 GAAP revenue of $270 million and non-GAAP revenue of $259 million. On Wednesday shares of MWW were trading as high as 7.44 but the negative earnings report sent that price into a tailspin, collapsing to a low of 5.72.
Shares of MWW are currently moving around the 5.98 level, well below the 50-day moving average of 8.00 and 200-day moving average of 8.20. Judging by the company’s outlook for the third-quarter it could be some time before they see those levels again.
MWW’s outlook for the third quarter cited “continued global economic weakness, particularly in Europe, and the impact of currency translation,” for their forecast, saying “third quarter bookings are expected to be down 10% to flat compared to the third quarter 2011 of $264 million.”
Right alongside the disappointing revenue report MWW revealed their second quarter Non-GAAP net income amounted to $6.8 million, or $0.06 per share, compared with $11 million, or $0.09 per share in the 2011 second quarter.
Despite the troubling figures MWW did their best to highlight accomplishments reached in the second quarter, most notably: North America bookings increased 14% on a year over year basis due primarily to bookings growth in the Government Solutions and Staffing and Newspapers verticals; Strength in the Government Solutions business was driven by the expansion of existing contracts as well as new awards from Federal, State and Local government agencies in North America; and the signing of a multi-year agreement with Kforce Inc. to deploy Power Resume Search®, using their 6Sense Semantic Search technology, across Kforce’s entire organization.
While MWW points to the positive it has become clear that the company is finding its current environment difficult to navigate. Europe accounts for about 25% of MWW’s revenue and the economic situation over there is not getting any better. Additionally, MWW is facing a more competitive climate in North America with several free services being offered by social and business networking sites like Facebook and LinkedIn.
Sal Iannuzzi, CEO of MWW, has acknowledged that these sites have played a role in decreased margins but has insisted that his company caters to a different clientele. While that may be true to an extent the fact remains MWW’s clientele aren’t getting the job done for the company.
With all the troubles facing MWW the whispers of a sale have turned into a roar and the company’s retention of Stone Key Partners and Bank of America Merrill Lynch back in March has become a focus of investors. That move was made to review strategic alternatives, something Iannuzzi said the company will continue to carry out.
If talk of a takeover continues to gain steam then it could benefit MWW’s share price as some analysts have estimated the stock could hit the mid-teens in a deal. Whether or not that is true remains to be seen but it is clear the immediate future for MWW’s business won’t be doing shareholders any favors.
