HR Firms Ride Market Rocket; Taleo To Restate $18 Million

Snoopy doing the happy danceGo ahead and cheer. Do a happy dance. Stocks were up today as Wall Street reacted to Treasury Secretary Timothy Geithner’s plan to breath life back into the U.S. banking system.

The stock of most publicly held HR firms was helped by the 497 point surge in the Dow and equally significant jumps in the other indices. Whether technology provider, staffing firm, or job board, the effect was felt equally. Monster, for instance, saw its stock jump 15.1 percent, besting by more than twice the Dow’s 6.8 percent rise. Closing at $8.45 a share, it’s still off its 52 week high of $29.

Staffing firm Manpower, which hit a high of $70.71 last year, closed up 10.7 percent to close at $31 a share.

Kenexa, Lawson, SuccessFactors, Taleo and Workstream — all HR technology vendors — were up ranging from 17.5 percent for Kenexa and Workstream’s 16 percent to Taleo’s 10.2 percent rise. The up-market’s coattails may have been muted in Taleo’s case by its announcement today that the accounting review begun last year would result in the restatement of some $18 million in consulting revenue.

The company has been issuing periodic updates about the review, so its conclusion wasn’t unexpected. In addition to restating (essentially making accounting adjustments), the end of the review will allow the company to file its tardy financial reports and resolve its threatened delisting by the NASDAQ, where the stock is traded.

Monday, after the market closed its frenetic day, Taleo officials said the revenue recognition review had concluded and the company will restate revenue going back as far as 2003. It will also be filing its delayed reports by the end of April.

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What it means is that about $18 million of revenue reported between 2003 and 2007 will be reassigned, resulting in relatively minor reductions in revenue reported during each of those years. Less than 4 percent of that $18 million wil be spread over the company’s financial quarters beginning from July 1, 2008, onward.

The company explained the adjustments in a press release saying: “Historically, when application services and consulting services were sold together, the company recognized consulting services revenue as the services were delivered. Now, in similar arrangements, the company’s consulting services revenue will be recognized ratably over the term of the application services agreement, typically three years.”

To put the dollars in perspective, Taleo said that over the period involved “a total of approximately $85 million in consulting revenue and $378 million of application revenue was recognized.”

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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