Summary
Automatic Data Processing, Inc. (ADP) reported solid financial results for the three months ended September 30, 2018, demonstrating robust revenue and earnings growth. Total revenues increased by 8% year-over-year, reaching $3,323.2 million, driven by strong performance across its Employer Services and PEO Services segments. This growth was supported by increased new business bookings and a rise in the average number of worksite employees. Net earnings saw a significant increase of 22% to $505.4 million, with diluted earnings per share rising from $0.93 to $1.15. This improvement was aided by an 8% increase in revenue and a lower effective tax rate, influenced by the Tax Cuts and Jobs Act. The company also continued its commitment to shareholder returns, repurchasing approximately $227 million in stock and paying out $303 million in dividends during the quarter, underscoring a healthy financial position and confidence in future growth.
Financial Highlights
52 data points| Revenue | $3.31B |
| Cost of Revenue | $1.93B |
| Gross Profit | $1.38B |
| SG&A Expenses | $713.90M |
| Operating Expenses | $2.68B |
| Interest Expense | $35.90M |
| Net Income | $505.40M |
| EPS (Basic) | $1.16 |
| EPS (Diluted) | $1.15 |
| Shares Outstanding (Basic) | 436.80M |
| Shares Outstanding (Diluted) | 439.90M |
Key Highlights
- 1Total Revenues increased by 8% to $3,323.2 million, driven by strong performance in Employer Services and PEO Services.
- 2Net Earnings grew by 22% to $505.4 million.
- 3Diluted Earnings Per Share (EPS) increased to $1.15 from $0.93 in the prior year period.
- 4Employer Services segment revenues grew 7%, and PEO Services segment revenues grew 10%, reflecting new business bookings and increased employee counts.
- 5The company returned approximately $530 million to shareholders through dividends ($303 million) and share repurchases ($227 million) during the quarter.
- 6The effective tax rate decreased significantly to 21.9% from 27.0% due to the Tax Cuts and Jobs Act.