(Reuters) - Online recruitment firm Monster Worldwide Inc MWW.N said it would sell its money losing China business as it talks to suitors about a possible sale of the full company.
Monster’s stock jumped 20 percent to $6.86 in morning trade on the New York Stock Exchange on Thursday as the company also said it was reviewing options for its developing markets businesses. The stock had fallen by nearly a third this year until Wednesday.
In March, the parent of Monster.com had retained Stone Key Partners and Bank of America Merrill Lynch to review strategic alternatives, including selling all or part of the company.
A number of potential suitors for Monster have been contacted and extensive due diligence conducted, Executive Vice President Tim Yates said on a post-earnings conference call.
New York-based Monster has been hit by a weak job market and growing competition from social networking websites such as LinkedIn Corp LNKD.N.
The staffing sector -- a barometer of overall economic health -- has seen a slowdown in Europe and an uncertain recovery in the United States, where unemployment currently stands at 7.9 percent.
Monster said the restructuring, including the sale of its Chinese business, China HR.com Holdings Ltd, and planned changes at its other developing markets businesses, will allow it to focus on North America and Europe that generate the lion’s share of its profit.
The current approximate run rate of the China and developing markets businesses is $50 million of revenue and $85 million of operating expenses, Yates said.
“Between now and the year-end, we will review our options for our other developing markets,” he added, without saying if Monster would pursue a sale of those businesses.
The company said it expects the restructuring to reduce operating costs by about $130 million on an annualized basis.
Monster reported a non-cash asset impairment charge and deferred tax asset write-off of $225 million related to the China business in its third quarter ended September 30.
The company had taken control of the Chinese job site in 2008, when it paid $174 million to acquire the 55 percent of the business it did not already own.
Excluding the China operations from current and prior period results, the company’s profit from continuing operations rose to $39.0 million, or 35 cents per share in the third quarter, from $18.5 million, or 15 cents per share, a year earlier.
Excluding other one-time items, the company earned 9 cents per share, on revenue that fell 10 percent to $221.7 million.
Monster said it expects to earn between 5 cents and 10 cents per share for the fourth quarter.
Reporting by Sagarika Jaisinghani in Bangalore; Editing by Joyjeet Das, Sriraj Kalluvila