Automatic Data Processing Inc.'s (ADP) fiscal fourth-quarter
profit improved 16% due to solid new-business sales growth and
higher payroll revenue, while the number of employees on U.S.
clients' payrolls increased.
The company now sees earnings rising 8% to 10% and revenue
growth of 8% to 10%. In May, the company projected earnings from
continuing operations rising 6% to 7% and revenue growth, excluding
acquisitions, of roughly 6%.
The payroll-processing and human-resources-outsourcing company
has seen its revenue grow in recent quarters, helped by strong
new-business sales growth in its employer-services and professional
employer organization services segments.
For the quarter ended June 30, ADP reported a profit of $241.8
million, or 48 cents a share, compared with $207.9 million, or 42
cents a share, a year earlier. Revenue rose 14% to $2.51
billion.
Analysts surveyed by Thomson Reuters had expected a profit of 49
cents a share on revenue of $2.44 billion.
Gross margin declined to 39.4% from 41.5%.
Revenue at the company's employer-services segment, the largest
top-line contributor by far, climbed 9%. New-business sales for
Employer Services and PEO Services 8%.
In the U.S., revenue from the traditional payroll and payroll
tax filing business grew by 4%. The number of employees on ADP's
clients' payrolls in the U.S. increased 2.6%, as measured on a
same-store-sales basis.
Shares closed Wednesday at $52.38 and were inactive premarket.
The stock is up 13% since the start of the year.
-By Mia Lamar and John Kell, Dow Jones Newswires; 212-416-3207; mia.lamar@dowjones.com