10-QPeriod: Q3 FY2008

AUTOMATIC DATA PROCESSING INC Quarterly Report for Q3 Ended Mar 31, 2008

Filed May 9, 2008For Securities:ADP

Summary

Automatic Data Processing, Inc. (ADP) reported a solid third quarter for fiscal year 2008, with total revenues growing 12% to $2.43 billion and net earnings from continuing operations increasing 12% to $403.6 million. Diluted earnings per share from continuing operations rose 18% to $0.77. The company demonstrated strong operational performance across its key segments, notably Employer Services and PEO Services, which saw significant revenue growth. ADP continues to focus on returning value to shareholders, evidenced by ongoing share repurchases and dividend payments. The company's financial position remains robust, with healthy operating cash flow and a strong liquidity position. While managing various operational expenses, ADP's strategic divestitures of non-core assets appear to be contributing to a more focused and potentially higher-growth business.

Key Highlights

  • 1Total revenues increased 12% to $2.43 billion for the three months ended March 31, 2008.
  • 2Net earnings from continuing operations grew 12% to $403.6 million.
  • 3Diluted EPS from continuing operations increased 18% to $0.77.
  • 4Employer Services revenue grew 9%, PEO Services revenue grew 20%, and Dealer Services revenue grew 8% year-over-year.
  • 5The company continued its share repurchase program, with 5.9 million shares repurchased during the quarter.
  • 6Despite increased operating expenses, the company maintained its overall margin for continuing operations.
  • 7ADP reported no exposure to sub-prime mortgages or collateralized debt obligations in its investment portfolio.

Frequently Asked Questions

Total revenues grew by 12% to $2.43 billion for the three months ended March 31, 2008. The key drivers of this growth were Employer Services (up 9%), PEO Services (up 20%), and Dealer Services (up 8%).

Net earnings from continuing operations increased by 12% to $403.6 million, and diluted earnings per share from continuing operations rose by 18% to $0.77 for the quarter, indicating improved profitability.

ADP continued its commitment to returning capital to shareholders by repurchasing approximately 5.9 million shares of common stock during the quarter and paying dividends. The company also has significant remaining authorization for future repurchases.

The company explicitly states that its investment portfolio does not include any asset-backed securities with underlying collateral of sub-prime mortgages or home equity loans, nor does it contain any collateralized debt obligations (CDOs) or collateralized loan obligations (CLOs).