51job, Inc. (NASDAQ: JOBS) stock fell over 1.2% on 20th November, 2020 and continued its bearish momentum on 0.04% on November 23rd, 2020 (as of 9:30 am GMT-5; Source: Google finance) after the company in the third quarter of FY 20 has reported 8.4% decline in the net revenues to RMB906.1 million (US$133.5 million) from RMB989.0 million for the same quarter in 2019. Further, gross profit for the third quarter of 2020 had fallen to RMB584.4 million (US$86.1 million) compared to RMB682.3 million for the same quarter of the prior year. The decline was mainly due to the lower level of revenues and the increase in cost of services as the Company stepped up investment in new technology and product development in the third quarter of 2020. Sequentially, when compared to the second quarter of 2020, the Company has added seasonal staff for the upcoming campus recruitment peak period, which has resulted in increased employee compensation expenses in the third quarter.
Gross margin, has contracted to 64.5% in the third quarter of 2020 compared with 69.0% for the same quarter in 2019. The company has generated Income from operations for the third quarter of 2020 of RMB175.0 million (US$25.8 million) compared to RMB256.7 million for the third quarter of 2019. Adjusted operating margin had contracted 23.0% in the third quarter of 2020 compared with 29.5% for the same quarter in 2019.
The company had reported non-GAAP adjusted net income attributable to 51job for the third quarter of 2020 of RMB243.0 million (US$35.8 million) compared to RMB303.7 million for the third quarter of 2019. Non-GAAP adjusted fully diluted earnings per share has fallen to RMB3.57 (US$0.53) in the third quarter of 2020 compared with RMB4.49 in the third quarter of 2019. At the end of September, 2020, the cash and short-term investments were of total RMB10,137.6 million (US$1,493.1 million) compared with RMB9,940.6 million as of December 31, 2019.
Meanwhile, for the third quarter of 2020, Online recruitment services revenues fell 13.9% to RMB545.5 million (US$80.3 million) compared to the same quarter in 2019. The year-over-year decline was on the back of the ongoing impact of the COVID-19 pandemic and global economic uncertainty on the business operations of companies in China, which has negatively impacted their recruitment demand and spending on the Company’s online recruitment platforms in 2020. However, when compared to the second quarter of 2020, third quarter online recruitment services revenues has posted growth of 8.4% sequentially as recruitment activity improved and the company’s contract signings with employers increased.