AUTOMATIC DATA PROCESSING INC Quarterly Report for Q1 Ended Sep 30, 2010

Summary

Automatic Data Processing, Inc. (ADP) reported total revenues of $2,229.4 million for the three months ended September 30, 2010, a 6% increase from $2,096.1 million in the prior year period. This growth was driven by increases across its Employer Services, PEO Services, and Dealer Services segments. Despite revenue growth, net earnings from continuing operations slightly decreased by 2% to $278.5 million, resulting in diluted earnings per share remaining flat at $0.56 year-over-year. The company completed a significant acquisition of Cobalt for approximately $402.5 million, which contributed to an increase in goodwill and intangible assets. Operating expenses also saw a notable increase of 10%, impacting profitability. The company maintained a strong liquidity position, with cash and marketable securities totaling $1,316.2 million and a healthy debt-to-equity ratio. ADP also continued its share repurchase program, acquiring approximately 1.2 million shares during the quarter.

Key Highlights

• 1Total revenues increased by 6% to $2,229.4 million for the three months ended September 30, 2010, compared to $2,096.1 million in the prior year period.
• 2Net earnings from continuing operations decreased slightly by 2% to $278.5 million, with diluted EPS remaining flat at $0.56.
• 3Acquisition of Cobalt for approximately $402.5 million, contributing to a significant increase in goodwill.
• 4Operating expenses increased by 10% to $1,311.9 million, impacting overall profitability.
• 5Employer Services segment revenues grew 6% to $1,559.2 million, while PEO Services and Dealer Services segments saw revenue increases of 15% and 12% respectively.
• 6The company maintained a strong financial position with $1,316.2 million in cash and marketable securities and a low debt-to-equity ratio of 0.6% at September 30, 2010.
• 7ADP repurchased approximately 1.2 million shares of common stock during the quarter.

Frequently Asked Questions