Automatic Data Processing Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Automatic Data Processing (NASDAQ:ADP) will unveil its latest earnings on Thursday, July 28, 2011. Automatic Data Processing, Inc. offers human resource, payroll, tax and benefits administration solutions to a wide range of clients.

Automatic Data Processing Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 48 cents per share, a rise of 14.3% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 47 cents. Between one and three months ago, the average estimate moved up, but has dropped from 49 cents during the last month. For the year, analysts are projecting profit of $2.52 per share, a rise of 6.3% from last year.

Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the third quarter, the company reported net income of 85 cents per share versus a mean estimate of profit of 85 cents per share. In the second quarter, the company beat estimates by one cent.

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Wall St. Revenue Expectations: On average, analysts predict $2.44 billion in revenue this quarter, a rise of 11.4% from the year ago quarter. Analysts are forecasting total revenue of $9.81 billion for the year, a rise of 9.9% from last year’s revenue of $8.93 billion.

Analyst Ratings: Analysts are bullish on Automatic Data Processing as 10 analysts rate it as a buy, two rate it as a sell and 12 rate it as a hold.

Key Stats:

The increase in profit in the third quarter breaks a streak of three consecutive quarters of year-over-year profit decreases. In the third quarter, net income rose 5% from the year earlier, while the figure dropped 1.8% in the second quarter, 2% in the first quarter and 41% in the fourth quarter of the last fiscal year.

The company’s revenue has now risen for two straight quarters. In third quarter, revenue increased 12.8% to $2.59 billion from the year earlier quarter. In the second quarter, the figure rose 9.6%.

Competitors to Watch: Paychex, Inc. (NASDAQ:PAYX), CBIZ, Inc. (NYSE:CBZ), Equifax Inc. (NYSE:EFX), McMillan Shakespeare Ltd. (NYSE:MMS), Blue Tax Group SA (NYSE:BTG), Colliers SA Holdings Ltd. (NYSE:COL).

Stock Price Performance: During June 23, 2011 to July 22, 2011, the stock price had risen $1.31 (2.5%) from $51.92 to $53.23. The stock price saw one of its best stretches over the last year between March 16, 2011 and March 25, 2011 when shares rose for eight-straight days, rising 4.2% (+$2) over that span. It saw one of its worst periods between July 7, 2011 and July 18, 2011 when shares fell for eight-straight days, falling 4.9% (-$2.68) over that span. Shares are up $7.59 (+16.6%) year to date.

(Source: Xignite Financials)

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