Summary
Automatic Data Processing, Inc. (ADP) reported its first-quarter results for fiscal year 2003, ending March 31, 2003. While consolidated revenues saw a modest increase of 2% to $1.9 billion, the company experienced a 6% decline in earnings before income taxes to $533 million, and a 6% drop in net earnings to $329 million, resulting in diluted earnings per share of $0.54, down from $0.56 in the prior year's quarter. This performance was primarily influenced by a significant downturn in the Brokerage Services segment, which was partially offset by growth in Employer Services and Dealer Services. Despite the mixed financial results, ADP maintained a strong financial position with substantial cash and marketable securities, and continued its share repurchase program. The company also announced a pending acquisition of ProBusiness Services, Inc. for approximately $500 million, subject to shareholder approval and regulatory review.
Key Highlights
- 1Consolidated revenues increased by 2% to $1.9 billion for the three months ended March 31, 2003, compared to the prior year.
- 2Net earnings decreased by 6% to $329 million, and diluted EPS fell to $0.54 from $0.56.
- 3Brokerage Services revenue declined significantly by 14% due to weakness in the financial services industry.
- 4Employer Services revenue grew by 6%, driven by payroll and tax businesses, with improved client retention.
- 5Dealer Services revenue showed strong growth of 15%, fueled by acquisitions and new business lines.
- 6The company announced a pending acquisition of ProBusiness Services, Inc. for approximately $500 million.
- 7ADP continues to execute its share repurchase program, repurchasing approximately 23.7 million shares during the nine-month period.