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 individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Adjusted earnings per share of $1.65 beat the Zacks Consensus Estimate by 10.7% and grew 17% year over year. Total revenues of $3.83 billion beat the consensus mark by 1.9% and improved 10% year over year on a reported basis as well as on an organic constant-currency basis.
So far this year, shares of ADP have gained 24.2% compared with 24.1% growth of the industry it belongs and 22.5% surge of the Zacks S&P 500 composite.
Image Source: Zacks Investment Research
Let’s check out the numbers in detail:
Segments in Detail
Employer Services revenues of $2.57 billion increased 8% on a reported basis as well as on an organic constant-currency basis. Pays per control increased 7% year over year.
PEO Services revenues were up 15% year over year to $1.26 billion. Average worksite employees paid by PEO Services were 629,000, up 15% year over year.
Interest on funds held for clients decreased 5% to $101 million. The company’s average client funds balance increased 22% to $26.9 billion. Average interest yield on client funds declined 40 basis points to 1.5%.
Margins
Adjusted EBIT increased 17% year over year to $915 million. Adjusted EBIT margin grew 140 basis points to 23.9%. The uptick was backed by higher operating revenues, which were partially offset by the effect of increased selling expenses and implementation costs.
ADP exited first-quarter fiscal 2022 with cash and cash equivalents of $1.60 billion compared with $2.58 billion in the prior quarter. Long-term debt of $2.99 billion was flat sequentially.
The company generated $121.9 million of cash from operating activities in the quarter. Capital expenditures were $35.9 million. The company paid out dividends worth $393.2 million and repurchased shares worth $528 million.
Fiscal 2022 Outlook
ADP raised its fiscal 2022 outlook. The company now expects revenues to register 7-8% growth compared with the prior growth rate of 6-7%. Adjusted EPS is now expectedto register 11-13% growth compared with the prior growth rate of 9-11%.
The company now expects Employer Services revenues to grow at a rate of 5-6% compared with the prior growth rate of 4% to 6% and PEO Services revenues at a rate of 11-13% compared with the prior growth rate of 9% to 11%
Equifax’s (EFX - Free Report) third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year on a reported basis and 14% on a local-currency basis.
IQVIA’s (IQV - Free Report) third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and improved 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year on a reported basis and 21.1% on constant-currency basis.
Omnicom’s (OMC - Free Report) third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Automatic Data Processing (ADP) Q1 Earnings & Revenues Beat
Automatic Data Processing, Inc.(ADP - Free Report) reported better-than-expected first-quarter fiscal 2022 results.
Adjusted earnings per share of $1.65 beat the Zacks Consensus Estimate by 10.7% and grew 17% year over year. Total revenues of $3.83 billion beat the consensus mark by 1.9% and improved 10% year over year on a reported basis as well as on an organic constant-currency basis.
So far this year, shares of ADP have gained 24.2% compared with 24.1% growth of the industry it belongs and 22.5% surge of the Zacks S&P 500 composite.
Let’s check out the numbers in detail:
Segments in Detail
Employer Services revenues of $2.57 billion increased 8% on a reported basis as well as on an organic constant-currency basis. Pays per control increased 7% year over year.
PEO Services revenues were up 15% year over year to $1.26 billion. Average worksite employees paid by PEO Services were 629,000, up 15% year over year.
Interest on funds held for clients decreased 5% to $101 million. The company’s average client funds balance increased 22% to $26.9 billion. Average interest yield on client funds declined 40 basis points to 1.5%.
Margins
Adjusted EBIT increased 17% year over year to $915 million. Adjusted EBIT margin grew 140 basis points to 23.9%. The uptick was backed by higher operating revenues, which were partially offset by the effect of increased selling expenses and implementation costs.
Employer Services segment margin increased 150 bps. PEO Services segment margin grew 70 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 first-quarter fiscal 2022 with cash and cash equivalents of $1.60 billion compared with $2.58 billion in the prior quarter. Long-term debt of $2.99 billion was flat sequentially.
The company generated $121.9 million of cash from operating activities in the quarter. Capital expenditures were $35.9 million. The company paid out dividends worth $393.2 million and repurchased shares worth $528 million.
Fiscal 2022 Outlook
ADP raised its fiscal 2022 outlook. The company now expects revenues to register 7-8% growth compared with the prior growth rate of 6-7%. Adjusted EPS is now expectedto register 11-13% growth compared with the prior growth rate of 9-11%.
The company now expects Employer Services revenues to grow at a rate of 5-6% compared with the prior growth rate of 4% to 6% and PEO Services revenues at a rate of 11-13% compared with the prior growth rate of 9% to 11%
Currently, ADP carries a Zacks Rank #3 (Hold). 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) third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year on a reported basis and 14% on a local-currency basis.
IQVIA’s (IQV - Free Report) third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and improved 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year on a reported basis and 21.1% on constant-currency basis.
Omnicom’s (OMC - Free Report) third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.