Deutsche Bank Lowers MAN 2Q EPS Estimates

Deutsche Bank is lowering its 2Q EPS estimate on shares of Manpower Inc. (NYSE: MAN) from $0.72 to $0.62 due to the earthquake in Japan.

“Based on Manpower's 5% rev exposure to Japan and ~5% exposure to auto & auto suppliers globally, we are reducing our revenue estimates for 2QE by -1.8% and 3QE by -0.5%,” Deutsche Bank writes. “2QE EPS goes from $0.72 to $0.62 (Street $0.68) while 3QE goes from $1.04 to $1.00 (Street $0.91). This moves EPS for 2011E from $3.13 to $3.00 (Street $2.86) while 2012E EPS goes from $4.31 to $4.27 (Street $3.97).

“Our changes are based on conversations with Japan & auto experts, but not Manpower management. While we have added back 80% of the removed 2011E revs in Japan to 2012E, we have not done that for auto. We have made slight adjustments to SG&A but not increased gross margins (as auto temping is likely lower gross margin).

“We have also not factored in disproportionate hits to temps from shifts being cut, or extra demand due to inventory rebuilding. If Manpower's shares take a hit from weaker than expected 2Q guidance due to Japan/auto, we would use the opportunity to add to positions.”

Manpower closed Tuesday at $60.95.