How did ADP perform financially in the quarter ended December 31, 2008, given the economic climate?

ADP demonstrated resilience, reporting a 2% increase in total revenues to $2.20 billion and a 3% increase in net earnings from continuing operations to $300.4 million. Diluted EPS rose to $0.59 from $0.55 in the prior year's quarter, indicating stable performance.

What were the main drivers of revenue growth for ADP during this period?

Revenue growth was primarily driven by strong performance in its Employer Services segment, which increased by 6%, and its PEO Services segment, which saw a 14% increase. These gains were partially offset by a slight decrease in Dealer Services revenue.

What is the company's liquidity and financial health situation?

ADP maintained a strong liquidity position, with $1.3 billion in cash and cash equivalents and $0.1 billion in marketable securities as of December 31, 2008. The company also reported a low debt-to-equity ratio of 1.1% and had no borrowings under its significant credit facilities, indicating a healthy financial standing.

Were there any significant impacts from the economic downturn on ADP's operations or investments?

While revenue growth was moderate, the company reported a 74% decrease in interest expense due to lower interest rates. The company also noted a $3.3 million loss related to its investment in the Reserve Fund, a money market fund affected by Lehman Brothers' bankruptcy, but this was a relatively small impact on overall results. Overall, ADP's diversified business model and prudent financial management helped mitigate the effects of the economic downturn.

ADP 10-Q Quarterly Report Q2 FY2009 — Revenue, Net Income, EPS

Summary

Automatic Data Processing, Inc. (ADP) reported solid financial results for the quarter ended December 31, 2008, demonstrating resilience amidst challenging economic conditions. Total revenues increased by 2% year-over-year to $2.20 billion, driven by growth in Employer Services and PEO Services, slightly offset by a decline in Dealer Services. Net earnings from continuing operations saw a modest increase of 3% to $300.4 million, translating to diluted earnings per share of $0.59, up from $0.55 in the prior year's comparable quarter. The company maintained a strong liquidity position, with significant cash and marketable securities on hand. Despite a slight increase in operating expenses, driven by pass-through costs in the PEO business and higher allowance for doubtful accounts, ADP managed its overall expenses effectively. The company's proactive approach to cost savings and its diversified service offerings across different segments provided a stable financial foundation.

Financial Highlights

28 data points

Beta

Revenue

$2.20B

0.5% Gross Margin

Net Income

$300.50M

0.1% Net Margin

EPS (Diluted)

$0.59

Cash & Equivalents

$1.30B

Free Cash Flow

$283.40M

Financial Statements

Beta

Revenue	$2.20B
Cost of Revenue	$1.18B
Gross Profit	$1.01B
SG&A Expenses	$573.10M
Operating Expenses	$1.77B
Interest Expense	$8.10M
Net Income	$300.50M
EPS (Basic)	$0.60
EPS (Diluted)	$0.59
Shares Outstanding (Basic)	503.40M
Shares Outstanding (Diluted)	506.10M

Key Highlights

1Total revenues grew 2% to $2.20 billion for the three months ended December 31, 2008, compared to $2.15 billion in the prior year.
2Net earnings from continuing operations increased by 3% to $300.4 million, with diluted EPS rising to $0.59 from $0.55.
3Employer Services revenue increased 6% and PEO Services revenue increased 14%, demonstrating strong performance in key segments.
4Dealer Services revenue saw a slight decrease of 1%, reflecting challenges in the automotive sector.
5The company maintained a strong liquidity position with $1.3 billion in cash and cash equivalents at the end of the period.
6Interest expense decreased significantly by 74% for the quarter, largely due to lower average interest rates on borrowings.
7Despite economic headwinds, ADP's 'pays per control' metric for its U.S. client payrolls showed only a marginal decrease, indicating business stability.

AUTOMATIC DATA PROCESSING INC Quarterly Report for Q2 Ended Dec 31, 2008

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions