Summary
Automatic Data Processing, Inc. (ADP) reported strong financial results for the nine months ended March 31, 2002, with total revenues reaching $5.16 billion, a 2% increase year-over-year. Net earnings saw a significant boost of 21% to $813.5 million for the nine-month period, driven by robust performance in Employer Services and efficient cost management across the organization. The company also experienced a 17% increase in net earnings for the third quarter, reaching $352.3 million. This growth was supported by a 1% increase in total revenues to $1.87 billion for the quarter. Key financial highlights include a substantial increase in earnings per share (EPS), with diluted EPS rising to $1.29 for the nine months and $0.56 for the quarter, reflecting growth driven by improved profitability and a reduction in outstanding shares due to ongoing share repurchase programs. ADP's balance sheet remains strong, with $2.8 billion in cash and marketable securities and a low long-term debt to equity ratio of 2%, underscoring its financial stability and capacity for future investments and shareholder returns.
Key Highlights
- 1Consolidated revenues grew 1% to $1.87 billion for the three months ended March 31, 2002, and 2% to $5.16 billion for the nine months ended March 31, 2002.
- 2Net earnings for the nine months ended March 31, 2002, increased by 21% to $813.5 million, compared to $669.7 million in the prior year.
- 3Diluted earnings per share (EPS) for the nine months ended March 31, 2002, increased to $1.29 from $1.04 in the prior year, representing a 24% increase.
- 4The company maintained a strong financial position with $1.2 billion in cash and cash equivalents and $1.6 billion in short-term and long-term marketable securities as of March 31, 2002.
- 5Shareholders' equity stood at $5.0 billion, with a strong capital structure indicated by a long-term debt to equity ratio of 2%.
- 6The adoption of SFAS 142 (Goodwill and Other Intangible Assets) eliminated goodwill amortization, positively impacting reported net earnings and EPS.
- 7ADP repurchased approximately 12.5 million shares of common stock in the first nine months of fiscal 2002, contributing to the decrease in outstanding shares and increased EPS.