Kforce.com earnings rise, but investors want more

By JEFF HARRINGTON

© St. Petersburg Times, published July 27, 2000

Kforce.com is the latest public company to learn that today's temperamental market does not tolerate even mild disappointments.

The Tampa online staffing company was punished on Wall Street after its second-quarter earnings fell a penny shy of forecasts. Its stock tumbled as much as 28 percent Wednesday before closing at $5 a share, down $1.56.

The reaction marred Kforce's effort to celebrate its return to profitability, rebounding from a first-quarter loss of $2.4-million.

Second-quarter revenues rose 4.4 percent to a record $197.7-million, compared with $189.4-million in the year-ago period. Net income soared 444 percent to $1.8-million, or 4 cents a share, from $332,000, or 1 cent a share.

The company took a $500,000 charge connected with a decision to have a third party build and lease out its new Tampa headquarters. Originally, Kforce intended to build the complex itself and own it. The new headquarters should be ready for move-in by next summer.

Kforce also took $1.2-million in charges connected to previously announced job cuts.

"We believe we are making significant headway toward our goal of aligning expenses with revenues," Kforce chief financial officer William Sanders said.

The company, formerly called Romac International, has struggled to reshape itself as an online job connection company in the past year.

Adding to its woes Wednesday was a report by Robinson-Humphrey analyst Mark Allen, who downgraded the stock from "buy" to "outperform." Allen, who could not be reached for comment, is the latest in a string of analysts to downgrade Kforce.

Goldman, Sachs analyst Meg Saegebarth has been one of the few in Kforce's corner, last month upgrading the company to Goldman's "recommended" list. On Wednesday, Saegebarth declined comment on Kforce's prospects.

© St. Petersburg Times. All rights reserved.