Summary
Automatic Data Processing, Inc. (ADP) reported stable revenues for the three months ended December 31, 2009, with a slight increase of $1.1 million to $2.204 billion, largely driven by growth in PEO Services and favorable foreign currency exchange rates, which offset declines in Employer and Dealer Services. For the six-month period, revenues saw a modest decline of 2% to $4.307 billion, primarily due to decreases in Employer and Dealer Services. Despite revenue pressures in some segments, the company demonstrated effective cost management, leading to a decrease in total expenses for both the quarter and the year-to-date period. This, combined with a lower effective tax rate (partially due to the resolution of tax matters), resulted in a 5% increase in net earnings from continuing operations for the quarter to $315.8 million ($0.62 diluted EPS), and a 4% increase for the six months to $599.9 million ($1.19 diluted EPS). The company also highlighted a strong financial position with robust working capital and ample liquidity from its credit facilities.
Financial Highlights
51 data points| Revenue | $2.20B |
| Cost of Revenue | $1.23B |
| Gross Profit | $970.80M |
| SG&A Expenses | $518.90M |
| Operating Expenses | $1.75B |
| Interest Expense | $2.50M |
| Net Income | $315.80M |
| EPS (Basic) | $0.63 |
| EPS (Diluted) | $0.62 |
| Shares Outstanding (Basic) | 502.00M |
| Shares Outstanding (Diluted) | 506.20M |
Key Highlights
- 1Total revenues remained stable for the quarter ended December 31, 2009, increasing slightly to $2.204 billion, driven by PEO Services growth and currency tailwinds.
- 2Net earnings from continuing operations increased by 5% to $315.8 million for the quarter and by 4% to $599.9 million for the six months, demonstrating effective cost control and improved tax efficiency.
- 3Diluted EPS from continuing operations grew to $0.62 for the quarter and $1.19 for the six months, aided by share repurchases and improved profitability.
- 4Operating expenses saw a notable increase of 4% for the quarter, primarily due to higher pass-through costs in PEO Services and foreign currency impacts.
- 5Selling, general, and administrative (SG&A) expenses decreased by 9% for the quarter and 8% for the six months, reflecting successful cost-saving initiatives.
- 6The company maintained a strong liquidity position with over $1.7 billion in cash and cash equivalents and access to significant credit facilities, with no borrowings outstanding under these facilities as of December 31, 2009.
- 7Dealer Services revenue experienced a decline of 5% for the quarter, impacted by dealership closings and economic pressures affecting the automotive sector.