Automatic Data Processing Inc. Earnings: Positive Earnings Streak Continues
S&P 500 (NYSE:SPY) component Automatic Data Processing Inc. (NASDAQ:ADP) reported its results for the third quarter. Automatic Data Processing offers human resource, payroll, tax, and benefits administration solutions to a wide range of clients.
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Automatic Data Processing Earnings Cheat Sheet for the Third Quarter
Results: Net income for Automatic Data Processing Inc. rose to $452.4 million (92 cents per share) vs. $423.8 million (85 cents per share) in the same quarter a year earlier. This marks a rise of 6.7% from the year-earlier quarter.
Revenue: Rose 6.8% to $2.92 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Automatic Data Processing Inc. beat the mean analyst estimate of 91 cents per share. Analysts were expecting revenue of $2.92 billion.
Quoting Management: President and chief executive officer Carlos Rodriguez said, “I am pleased with ADP’s third quarter results. New business sales growth was solid for Employer Services and PEO Services. Third quarter new business sales for Dealer Services were also solid. I am also pleased that each business segment posted year-over-year pretax margin improvement for the third quarter. However, it is important to note that ADP’s total pretax margin comparisons continued to be negatively impacted by the decline in high-margin client interest revenues resulting from lower interest rates. In addition, subsequent to the end of the quarter, we closed a strategic acquisition in Employer Services that is expected to contribute to ADP’s future growth.
The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 20.9% and in the first quarter, the figure rose 8.7%.
The company beat estimates last quarter after meeting expectations in the second quarter with net income of 68 cents per share.
Looking Forward: The average estimate for the fourth quarter is steady at 54 cents a share. The average estimate for the fiscal year has remained at $2.74 per share.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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