(RTTNews) - Automatic Data Processing Inc. (ADP: News ) reported Wednesday a 2.6% growth in profit for the first quarter, reflecting lower costs and expenses that offset a 4% decline in revenues that were negatively impacted by the severe economic conditions. Quarterly earnings per share as well as top line beat market projections. Further, the Roseland, New Jersey-based outsourcing solutions provider lifted the lower end of its fiscal 2010 adjusted earnings forecast range.

Automatic Data Processing, or ADP, reported that its first-quarter net earnings rose to $284.1 million from $276.9 million last year, while earnings per share grew 4% to $0.56 from prior year's $0.54 per share, on fewer shares outstanding.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues declined 4% to $2.10 billion from $2.18 billion in the same quarter last year, yet beat fourteen Wall Street analysts' estimated revenues of $2.05 billion. The company noted that revenues continue to be negatively impacted by the severe economic conditions that began toward the end of the prior fiscal year's first quarter. In the quarter, unfavorable foreign exchange comparisons contributed two percentage points of revenue decline.

Revenues, other than interest on funds held for clients and PEO revenues, fell to $1.68 billion from $1.75 billion a year ago. Interest on funds held for clients was $127.9 million, down from $151.9 million last year. Meanwhile, PEO revenues grew to $293.9 million from prior year's $277.1 million.
ADP, which serves about 570 thousand clients, offers the widest range of HR, payroll, tax and benefits administration solutions from a single source. The company also provides integrated computing solutions to auto, truck, motorcycle, marine and recreational vehicle dealers throughout the world.

Segment-wise, revenues from Employer Services declined 3% year-over-year to $1.49 billion for the first quarter. In the United States, revenues from traditional payroll and payroll tax filing business declined 7%, while beyond payroll revenues grew 3%.

However, PEO Services revenues grew 6% to $296.2 million mainly on higher benefits pass-through revenues that resulted from increases in both benefit rates and the number of worksite employees.

Combined Employer Services and PEO Services worldwide new business sales declined 2% for the quarter.

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