We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Automatic Data Processing (ADP) Q2 Earnings & Revenues Beat
Read MoreHide Full Article
Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected second-quarter fiscal 2021 results.
Adjusted earnings per share of $1.52 beat the Zacks Consensus Estimate by 17.8% but were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year on a reported basis as well as on an organic constant-currency basis.
Let’s check out the numbers in detail.
Segments in Detail
Employer Services revenues of $2.51 billion decreased 1% year over year on a reported and 2% on an organic constant-currency basis. Pays per control decreased 6% year over year. New business bookings decreased 7%.
PEO Services revenues were up 5% year over year to $1.18 billion. Average worksite employees paid by PEO Services were 571,000, down 2% from the prior-year quarter.
Interest on funds held for clients decreased 23% to $105 million. The company’s average client funds balances remained flat at $25.1 billion. Average interest yield on client funds declined 50 basis points to 1.7%.
Margins
Adjusted EBIT decreased 1% year over year to $848 million. Adjusted EBIT margin declined 30 basis points to 22.9%.
Balance Sheet and Cash Flow
ADP exited second-quarter fiscal 2021 with cash and cash equivalents of $1.60 billion compared with $1.61 billion in the prior quarter. Long-term debt of $1.99 billion was flat sequentially.
The company generated $706.4 million of cash from operating activities in the quarter. Capital expenditures were $37.5 million. The company paid out dividends worth $390.7 million and repurchased shares worth $261.5 million.
Fiscal 2021 Outlook
ADP expects fiscal 2021 revenues to be up 1% to 3%. It had earlier expected revenues to be down 1% to up 1%. Adjusted earnings per share are anticipated to be down 2% to up 2% compared with the prior guidance of a decline of 3-7%.
Investors interested in the broader Zacks Business Services sector are keenly awaiting fourth-quarter 2020 earnings reports of key players like Waste Connections (WCN - Free Report) , Waste Management (WM - Free Report) and Republic Services (RSG - Free Report) . While Waste Connections will release earnings on Feb 17, Waste Management and Republic Services will report the same on Feb 18 and Feb 22, respectively.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Automatic Data Processing (ADP) Q2 Earnings & Revenues Beat
Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected second-quarter fiscal 2021 results.
Adjusted earnings per share of $1.52 beat the Zacks Consensus Estimate by 17.8% but were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year on a reported basis as well as on an organic constant-currency basis.
Let’s check out the numbers in detail.
Segments in Detail
Employer Services revenues of $2.51 billion decreased 1% year over year on a reported and 2% on an organic constant-currency basis. Pays per control decreased 6% year over year. New business bookings decreased 7%.
PEO Services revenues were up 5% year over year to $1.18 billion. Average worksite employees paid by PEO Services were 571,000, down 2% from the prior-year quarter.
Interest on funds held for clients decreased 23% to $105 million. The company’s average client funds balances remained flat at $25.1 billion. Average interest yield on client funds declined 50 basis points to 1.7%.
Margins
Adjusted EBIT decreased 1% year over year to $848 million. Adjusted EBIT margin declined 30 basis points to 22.9%.
Balance Sheet and Cash Flow
ADP exited second-quarter fiscal 2021 with cash and cash equivalents of $1.60 billion compared with $1.61 billion in the prior quarter. Long-term debt of $1.99 billion was flat sequentially.
The company generated $706.4 million of cash from operating activities in the quarter. Capital expenditures were $37.5 million. The company paid out dividends worth $390.7 million and repurchased shares worth $261.5 million.
Fiscal 2021 Outlook
ADP expects fiscal 2021 revenues to be up 1% to 3%. It had earlier expected revenues to be down 1% to up 1%. Adjusted earnings per share are anticipated to be down 2% to up 2% compared with the prior guidance of a decline of 3-7%.
Currently, ADP carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Investors interested in the broader Zacks Business Services sector are keenly awaiting fourth-quarter 2020 earnings reports of key players like Waste Connections (WCN - Free Report) , Waste Management (WM - Free Report) and Republic Services (RSG - Free Report) . While Waste Connections will release earnings on Feb 17, Waste Management and Republic Services will report the same on Feb 18 and Feb 22, respectively.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>