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Administaff 3Q profit outlook tops Street forecast

Friday October 17, 2008

The company, a PEO (Professional Employer Organization) supplies workers for small- and medium-sized businesses, said gross profit per worksite employee per month is expected to rise to $239 in the third quarter. The figure is up from a previous estimate of $233 to $235 that the company issued Aug. 1, and represents a 7.7 percent increase compared with the year-ago period.

The higher profit will help offset operating expenses which are now expected to total $68.6 million, just above the company’s previous guidance for $68 million to $68.5 million.

“Administaff continues to perform well in spite of uncertainty in the marketplace and the disruption of Hurricane Ike,” said Paul Sarvadi, chairman and chief executive, in a statement. “While we do not expect to be unaffected by the recent market turmoil, we are positioned to remain opportunistic with no debt and a strong balance sheet.”

The Houston-based human resources provider is scheduled to release third-quarter results on Nov. 3.

Administaff said it had repurchased 457,000 shares of its common stock at a cost of $11.2 million from July 1 through Thursday under a buyback program that authorized repurchase of more than 1 million shares.

Shares of Administaff closed Thursday at $18.09, near the bottom end of the stock’s 52-week range of $16.45 to $40.40.

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