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Adjusted earnings per share of $1.89 beat the Zacks Consensus Estimate by 3.9% but declined 2% year over year. Total revenues of $4.10 billion beat the consensus mark by 0.3% and improved 1.3% year over year on a reported basis and 1% on an organic constant-currency basis.
So far this year, shares of ADP have gained 11.2% compared with 8.8% surge of the industry it belongs to and 12.3% rally of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Segments in Detail
Employer Services revenues of $2.78 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 increased 7%.
PEO Services revenues were up 7% year over year to $1.32 billion. Average worksite employees paid by PEO Services were 594,000, flat year over year.
Interest on funds held for clients decreased 32% to $107 million. The company’s average client funds balance increased 6% to $33.2 billion. Average interest yield on client funds declined 70 basis points to 1.3%.
Margins
Adjusted EBIT decreased 2% year over year to $1.07 billion. Adjusted EBIT margin declined 90 basis points (bps) to 26.3%. The downfall was backed by rise in incentive compensation costs, implementation costs, and other growth investments, which were partially offset by higher revenues.
ADP exited third-quarter fiscal 2021 with cash and cash equivalents of $1.89 billion compared with $1.60 billion in the prior quarter. Long-term debt of $1.99 billion was flat sequentially.
The company generated $1.25 billion of cash from operating activities in the quarter. Capital expenditures were $64.3 million. The company paid out dividends worth $397.8 million and repurchased shares worth $427.4 million.
Fiscal 2021 Outlook
ADP now expects fiscal 2021 revenues to be up 2% to 3%. It had earlier expected revenues to be up 1% to 3%. Adjusted earnings per share are anticipated to be flat to 1%. It had earlier expected adjusted earnings to be down 2% to up 2%.
Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Automatic Data Processing (ADP) Beats on Q3 Earnings, Ups View
Automatic Data Processing, Inc.(ADP - Free Report) reported better-than-expected third-quarter fiscal 2021 results.
Adjusted earnings per share of $1.89 beat the Zacks Consensus Estimate by 3.9% but declined 2% year over year. Total revenues of $4.10 billion beat the consensus mark by 0.3% and improved 1.3% year over year on a reported basis and 1% on an organic constant-currency basis.
So far this year, shares of ADP have gained 11.2% compared with 8.8% surge of the industry it belongs to and 12.3% rally of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Segments in Detail
Employer Services revenues of $2.78 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 increased 7%.
PEO Services revenues were up 7% year over year to $1.32 billion. Average worksite employees paid by PEO Services were 594,000, flat year over year.
Interest on funds held for clients decreased 32% to $107 million. The company’s average client funds balance increased 6% to $33.2 billion. Average interest yield on client funds declined 70 basis points to 1.3%.
Margins
Adjusted EBIT decreased 2% year over year to $1.07 billion. Adjusted EBIT margin declined 90 basis points (bps) to 26.3%. The downfall was backed by rise in incentive compensation costs, implementation costs, and other growth investments, which were partially offset by higher revenues.
Employer Services segment margin decreased 120 bps. PEO Services segment margin grew 100 bps.
Automatic Data Processing, Inc. Price, Consensus and EPS Surprise
Automatic Data Processing, Inc. price-consensus-eps-surprise-chart | Automatic Data Processing, Inc. Quote
Balance Sheet and Cash Flow
ADP exited third-quarter fiscal 2021 with cash and cash equivalents of $1.89 billion compared with $1.60 billion in the prior quarter. Long-term debt of $1.99 billion was flat sequentially.
The company generated $1.25 billion of cash from operating activities in the quarter. Capital expenditures were $64.3 million. The company paid out dividends worth $397.8 million and repurchased shares worth $427.4 million.
Fiscal 2021 Outlook
ADP now expects fiscal 2021 revenues to be up 2% to 3%. It had earlier expected revenues to be up 1% to 3%. Adjusted earnings per share are anticipated to be flat to 1%. It had earlier expected adjusted earnings to be down 2% to up 2%.
Currently, ADP carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>