Summary
Automatic Data Processing, Inc. (ADP) reported strong performance for the nine months ended March 31, 2011, demonstrating revenue growth across its key segments: Employer Services, PEO Services, and Dealer Services. Total revenues increased by 9% year-over-year for the nine-month period, driven by a combination of client retention, increased client fund balances, and strategic acquisitions. Net earnings from continuing operations saw a modest increase of 1% to $1.01 billion, with diluted EPS from continuing operations rising to $2.03. The company highlighted a stable business model characterized by recurring revenues, healthy margins, strong client retention, and low capital expenditure requirements. ADP continued to return value to shareholders through dividends, marking the 36th consecutive year of dividend payout increases, and share repurchases. The company also emphasized its prudent investment strategy for client funds, prioritizing safety, liquidity, and diversification. Investments in technology and headcount, alongside eight acquisitions including Cobalt, contributed to expense growth but are expected to support long-term strategies.
Financial Highlights
53 data points| Revenue | $2.74B |
| Gross Profit | $1.22B |
| SG&A Expenses | $577.30M |
| Operating Expenses | $2.10B |
| Interest Expense | $1.40M |
| Net Income | $423.80M |
| EPS (Basic) | $0.85 |
| EPS (Diluted) | $0.85 |
| Shares Outstanding (Basic) | 496.20M |
| Shares Outstanding (Diluted) | 501.30M |
Key Highlights
- 1Total revenues increased by 9% to $7.37 billion for the nine months ended March 31, 2011, compared to the prior year period.
- 2Net earnings from continuing operations grew 1% to $1.01 billion for the nine months ended March 31, 2011.
- 3Diluted earnings per share from continuing operations increased to $2.03 for the nine months ended March 31, 2011, up from $1.98 in the prior year.
- 4Employer Services, the largest segment, saw revenue growth of 7% to $5.15 billion for the nine months, driven by payroll/tax filing and 'beyond payroll' services.
- 5PEO Services and Dealer Services also exhibited strong revenue growth of 16% and 22%, respectively, for the nine-month period.
- 6The company completed eight acquisitions, including Cobalt, investing approximately $369.3 million during the nine months ended March 31, 2011.
- 7ADP continued to return capital to shareholders, with dividends declared increasing and share repurchases made during the period.