Summary
Automatic Data Processing, Inc. (ADP) reported its quarterly results for the period ending September 29, 2002, showcasing a continued trend of revenue and earnings growth. Total revenues increased by 2% year-over-year to $1.65 billion, driven primarily by the Employer Services segment. Net earnings saw a healthy 7% increase, reaching $210.4 million, which translated to diluted earnings per share of $0.34, up from $0.31 in the prior year. The company maintained a strong financial position with significant cash and marketable securities and a low debt-to-equity ratio. While operating cash flows saw a decrease compared to the previous year, largely due to pre-funding of employee benefit plans, investing activities provided substantial cash through marketable securities sales. ADP also continued its aggressive share repurchase program. Management expressed confidence in future performance, forecasting mid-single-digit growth in revenue and EPS for fiscal year 2003.
Key Highlights
- 1Total revenues increased by 2% to $1.65 billion for the quarter ended September 30, 2002, compared to $1.61 billion in the prior year.
- 2Net earnings grew by 7% to $210.4 million, up from $196.6 million in the same period last year.
- 3Diluted earnings per share rose to $0.34 from $0.31, reflecting both earnings growth and a reduction in outstanding shares.
- 4Employer Services, the largest segment, showed revenue growth of 4% and pre-tax earnings growth of 11%.
- 5The company repurchased approximately 18.4 million shares of common stock in the first three months of fiscal 2003.
- 6ADP ended the quarter with a robust financial position, holding $2.3 billion in cash and marketable securities and a low long-term debt to equity ratio of 2%.