Summary
Automatic Data Processing, Inc. (ADP) reported solid financial results for the quarter ended September 30, 2001, demonstrating continued growth and a strong financial position. Total revenues reached $1.61 billion, a 4% increase year-over-year, driven primarily by its Employer Services segment. Net earnings saw a significant increase of 7% to $196.6 million, or $0.31 per diluted share, up from $0.27 in the prior year period (pro forma adjusted). This growth was achieved despite a weaker economic environment that impacted client retention and new business sales in some segments, as well as the direct effects of the September 11th terrorist attacks on Brokerage Services. The company also benefited from the adoption of SFAS 142, which eliminated goodwill amortization, positively impacting reported earnings and reducing the effective tax rate.
Key Highlights
- 1Total revenues grew 4% to $1.61 billion for the quarter ended September 30, 2001.
- 2Net earnings increased by 7% to $196.6 million, with diluted EPS rising to $0.31 from a pro forma adjusted $0.28.
- 3Employer Services, ADP's largest segment, showed an 8% revenue increase, although growth moderated due to economic conditions.
- 4The adoption of SFAS 142 eliminated goodwill amortization, contributing to higher reported net income and a lower effective tax rate.
- 5The company repurchased approximately 9 million shares of common stock for treasury during the quarter, signaling confidence and capital return to shareholders.
- 6ADP maintains a strong financial position with $2.4 billion in cash and marketable securities and a low long-term debt to equity ratio of 2%.