Leading staffing firm Robert Half International Inc. RHI reported in-line earnings in the first quarter of 2016, while revenues beat expectations owing to consistently rising demand for staffing services led by an improvement in the U.S. economy. Shares jumped 2.04% on Apr 26 after the release. First quarter 2016 earnings of 64 cents per share came in line with the Zacks Consensus Estimate, but exceeded the prior-year quarter adjusted earnings of 58 cents by 10.3%. Earnings came within the guided range of 61 cents to 67 cents per share. Robert Half witnessed strong year-over-year earnings growth driven by solid demand for services provided by skilled professionals as well as a growing labor market in the U.S. The company’s international operations also improved, particularly driven by higher demand for staffing and consulting services. In fact, the company’s earnings have now grown in double digits for 24 consecutive quarters on a year-over-year basis. Robert Half International Inc. - Earnings Surprise | FindTheBest Robert Half's total revenue grew 8.1% year over year to $1.303 billion, driven by broad-based revenue gains and higher demand for Robert Half's professional staffing and consulting services owing to improved labor markets and low unemployment in numerous professional occupations, as well as a more positive economic backdrop in many of its non-U.S. markets. Revenue growth was also fueled by strong results from Protiviti. Revenues beat the Zacks Consensus Estimate of $1.295 billion by 0.6% and were within management’s guidance range of $1.270–$1.330 billion. On a constant currency basis, revenues grew 7.8%. Though results have increased on a year-over-year basis, the rate of growth has declined sequentially, possibly due to significant currency headwinds Gross margin declined 20 basis points (bps) to 40.8% in the first quarter. Operating margin decreased 30 bps to 10.3% in the quarter due to lower gross margin and lower margin at Protiviti. Segment Details Based on the nature of services, the company has three reportable operating segments namely, Temporary and Consultant Staffing; Permanent Placement Staffing and Risk Consulting and Internal Audit Services. Revenues from Temporary and Consultant Staffing and Permanent Placement Staffing come under the global staffing division, while Risk Consulting and Internal Audit Services are reported under the Protiviti division. Global Staffing Division: Global Staffing revenues increased 7.1% year over year, driven by 8.9% growth in U.S. revenues. International revenues remained same from the prior-year quarter. Currency had a negative impact of 1.1% during the quarter. On a constant currency basis, global staffing increased 6.9%. Protiviti: Protiviti revenues increased 14.4%, driven by 16.2% growth in U.S. revenues and 5.4% growth in international revenues. Currency had a negative impact of 0.7% during the quarter. On a constant currency basis, Protiviti revenues increased 13.7%. Financial Update Robert Half had cash and cash equivalents of $214.1 million at the end of first quarter, compared with $217.7 million at the end of fourth quarter. Capital expenditure was $19 million in the first quarter compared with $26.8 million in the fourth quarter. During the quarter, the company repurchased 0.7 million shares for $29 million. There are approximately 9.7 million shares available for repurchase under the board approved stock repurchase plan. Second Quarter 2016 Guidance The company issued earnings and sales guidance for the second quarter of 2016. Robert Half expects revenues in the range of $1.325–$1.385 billion for the second quarter, representing an increase of 6% from the prior-year quarter on a reported basis. The company expects earnings in the range of 70 cents –76 cents per share, which implies a growth rate of 8% from the year-ago earnings. The Zacks Consensus Estimate for the second quarter stands at 76 cents. Protiviti also has an impressive growth outlook due to a robust regulatory environment and increased need for stronger internal controls and data security measures. Robert Half carries a Zacks Rank #3 (Hold). Better-ranked stocks in the staffing industry include BG Staffing, Inc. BGSF and ManpowerGroup Inc. MAN, which hold a Zacks Rank #2 (Buy). A better-ranked stock in the broader consumer staple sector is Unilever Plc UL, also carrying a Zacks Rank #2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UNILEVER PLC (UL): Free Stock Analysis Report MANPOWER INC WI (MAN): Free Stock Analysis Report ROBT HALF INTL (RHI): Free Stock Analysis Report BG STAFFING INC (BGSF): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research