Summary
Automatic Data Processing, Inc. (ADP) reported solid financial results for the nine months ended March 31, 2013, with total revenues increasing 6% to $8.5 billion and net earnings from continuing operations rising 1% to $1.14 billion. The company demonstrated consistent growth across its core segments: Employer Services, PEO Services, and Dealer Services. Despite a challenging economic environment characterized by low interest rates, which impacted interest income from client funds, ADP managed to expand its client base and improve revenue retention. Investments in salesforce productivity and product innovation contributed to new business growth. The company maintained a strong financial position with substantial cash and marketable securities, underscoring its ability to return value to shareholders through dividends and share repurchases.
Financial Highlights
51 data points| Revenue | $3.11B |
| Gross Profit | $1.37B |
| SG&A Expenses | $653.60M |
| Operating Expenses | $2.40B |
| Interest Expense | $1.20M |
| Net Income | $482.70M |
| EPS (Basic) | $1.00 |
| EPS (Diluted) | $0.99 |
| Shares Outstanding (Basic) | 482.70M |
| Shares Outstanding (Diluted) | 486.50M |
Key Highlights
- 1Total revenues grew by 6% year-over-year to $8.5 billion for the nine months ended March 31, 2013, driven by strong performance in Employer Services, PEO Services, and Dealer Services.
- 2Net earnings from continuing operations increased by 1% to $1.14 billion for the nine-month period.
- 3Diluted EPS from continuing operations saw a 2% increase, reaching $2.33 for the nine months ended March 31, 2013, reflecting improved profitability and a reduced share count.
- 4The company successfully navigated the impact of lower interest rates on client fund interest income by increasing average client fund balances by 7%.
- 5Operating expenses and selling, general, and administrative expenses increased, largely due to investments in salesforce headcount, acquisitions, and systems development, consistent with the company's growth strategy.
- 6ADP continued its commitment to returning capital to shareholders, repurchasing approximately 6.9 million shares during the nine months ended March 31, 2013, and continuing its dividend payments.
- 7The company maintained a strong balance sheet with $1.8 billion in cash and marketable securities at March 31, 2013, and a low debt-to-equity ratio of 0.2%.