Business outsourcing solutions provider Automatic Data Processing Inc. (ADP), Wednesday reported a 21 percent rise in second-quarter earnings on growth across all segments and gains from asset sale. Both earnings and revenues for the quarter were in line with Street estimates.
Looking ahead to fiscal year 2012, Automatic Data clipped the top end of its prior guidance, mainly to reflect the absence of one-time gains.
Roseland, New Jersey-based Automatic Data earned $375 million or $0.76 per share for the fourth quarter, compared to $310 million or $0.62 per share last year.
Results for the quarter include a one-time gain of $66 million related to asset sales. Excluding items, adjusted earnings for the quarter was $334 million or $0.68 per share.
On average, 20 analysts polled by Thomson Reuters expected earnings of $0.68 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the second quarter grew 7 percent to $2.58 billion from $2.4 billion in the same quarter last year. Analysts expected revenues of $2.58 billion for the quarter.
On an organic basis, revenues for the quarter were up 6 percent.
Employer Services revenues grew 7 percent from last year to $1.82 billion. Margin at the segment was under pressure by higher sales-related costs and investment overheads.
PEO Services, which comprise employment administration outsourcing solutions, increased 16 percent, while Dealer Services grew 7 percent, year-over-year. Interest on funds held for clients slipped 9 percent from last year to $117.9 million.
For 2012, Automatic Data expects earnings per share to grow 8 to 9 percent from 2011, compared to its prior forecast of an 8 to 10 percent growth. The new guidance reflects a $0.02 earnings per share decline for the rest of the year from sale of assets. Revenues are still expected to grow 7 to 9 percent. The Street currently expect the company to earn $2.75 per share for 2012.
The company expects continued low interest rates to hurt margins and earnings for the year.
ADP is trading at $56.53, down $0.20 or 0.35%, on a volume of 1.5 million shares on the Nasdaq.
For comments and feedback contact: editorial@rttnews.com
Business News
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.