Kelly Services Profit Zooms

First-quarter earnings double.
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Kelly Services

(KELYA) - Get Report

, a staffing services provider, said its first-quarter earnings more than doubled from the year-ago period.

The Troy, Mich.-based company earned $8.6 million, or 24 cents a share, in the quarter, compared with $3.9 million, or 11 cents a share, a year ago. Analysts surveyed by Thomson Financial were expecting earnings of $7.3 million, or 18 cents a share, in the most recent quarter.

First-quarter revenue rose 8.9% from a year ago period to $1.4 billion as against analysts' expectation of $1.3 billion.

The company expects to earn 34 cents a share to 39 cents a share in the second quarter compared with its earlier forecast of 14 cents to 19 cents, on Jan. 25. Earnings for the full year are expected to be $1.50 a share to $1.60 a share compared with an earlier forecast of $1.45 a share to $1.60 a share. On the other hand, analysts are expecting earnings of 39 cents a share in the second quarter and $1.55 a share in the full year.

"We are very pleased to report that Kelly has gotten off to a great start in 2006. We continue to transform solid sales increases into market share gains, improve operating efficiency, and produce strong earnings growth,'' the company said. "We are particularly encouraged by the results of our expense control efforts. We now have improved our expense efficiency in 15 out of the last 16 quarters. We reduced expenses to 15.1% of sales in the first quarter, which is the lowest first quarter expense rate Kelly has achieved in over 20 years.''

First-quarter gross profit rose 7.5% from a year ago period to $219.4 million, gross margin fell marginally 21 basis points to 16.1%. Operating income for the quarter more than doubled to $13.4 million and operating margin increased 50 basis points to 1%.

By segment, first-quarter revenue from U.S. segment rose 9.4% from a year ago period to $618.8 million and operating income for the segment increased 16.3% to $29.5 million. Revenue from professional, technical, and staffing alternatives segment rose 9.6% from a year ago period to $298.5 million and operating income increased 32.4% to $19.3 million. Revenue from international segment rose 7.6% from a year ago period to $442.7 million and operating income increased to $3.3 million from $48,000 a year ago.

The Kelly stock was up 21 cents $27.50 Tuesday.

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