Monster’s Weak 2nd Quarter Prompts Selloff

Job board revenue Q2 2014Although it’s much too early yet for Monster’s ambitious “three pillars” strategy to become the transformative force executives are predicting, the financial markets were hoping the company did a little better in the second quarter of the year than in the first quarter.

It didn’t.

After Monster reported earning 8 cents a share on revenue of $194.4 million, and lowering its financial outlook for the current quarter, investors sold off shares of the struggling company at twice the normal volume, pushing down its price almost 13 percent by early afternoon. Monster stock closed Monday at $6.62 a share. Not long before the market’s close, the stock was off 15.6 percent to $5.59.

Analysts were predicting the company would earn 9 cents a share, off from last year’s same quarter earnings of 13 cents. The also wanted $4.4 million more than the company delivered in revenue. And for this third quarter, the consensus of analyst expectations was for 10 cents a share.

Instead, the company predicted it might earn 4 cents. Or nothing.

Putting a positive spin on the numbers, Monster Chairman, President, and CEO Sal Iannuzzi noted the first year-over-year growth in North American careers revenue since the recession (up just over $500,000), and a $32 million sale to the State of Florida. However, he acknowledged these “were tempered by the fact that overall revenue was somewhat muted in the quarter.”

He blamed the 2.8 percent overall decrease in revenue on price competition from Monster’s market competitors and a salesforce distracted by changes to its organization as it was being readied for selling the realigned product line. This includes new job posting and sourcing services, especially the TalentBin profiling service and Monster Twitter Cards, as well as its software-as-a-service tools.

Announced on May 14, the company began rolling out its products and packages over the last few months, formally launching the talent cards and TalentBin on July 1. By then, Monster’s new job search aggregation strategy had collected and made available more than a million job postings. Iannuzzi said the number has now reached 3 million plus and will eventually top 6 million.

Complaining about the repricing by competitors, Iannuzzi called it a commoditization of the job posting business. Nevertheless, it prompted the company to “speed up rather than slow down our transition, even at the risk of experiencing some disruption of our short-term sales efforts and revenue.”

Whatever the reason behind Monster’s financial performance, it’s the only one of the public careers publishers to show a decline. Last week, both Dice Holdings and LinkedIn reported strong revenue growth, both of which were in double digits. LinkedIn turned in an especially strong performance, with a nearly 50 percent increase in recruitment revenue.

Privately held CareerBuilder said it grew its North American sales by 1.7 percent to $176 million.