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.
Automatic Data Processing (ADP) Q3 Earnings Beat, '22 View Up
Read MoreHide Full Article
Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected third-quarter fiscal 2022 results.
Adjusted earnings per share of $2.21 beat the Zacks Consensus Estimate by 6.8% and grew 16.9% year over year. Total revenues of $4.51 billion beat the consensus mark by 1.2% and improved 10% year over year on a reported basis and 11% on an organic constant-currency basis.
Over the past year, shares of ADP have gained 19.1% compared with 17.4% growth of the industry it belongs to and 2.5% 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 $3 billion increased 8% on a reported basis and 9% on an organic constant-currency basis. Pays per control increased 7% year over year.
PEO Services revenues were up 14% year over year to $1.51 billion. Average worksite employees paid by PEO Services were 688,000, up 16% year over year.
Interest on funds held for clients increased 10% to $118 million. The company’s average client funds balance increased 15% to $38.1 billion. Average interest yield on client funds declined 10 basis points to 1.2%.
Margins
Adjusted EBIT increased 12% year over year to $1.2 billion. Adjusted EBIT margin grew 50 basis points to 26.8%. The uptick was backed by higher revenues, which were partially offset by the effect of increased expenses related to selling, implementation and service, and higher PEO pass-through expenses.
ADP exited third-quarter fiscal 2022 with cash and cash equivalents of $1.63 billion compared with $1.75 billion in the prior quarter. Long-term debt of $2.99 billion was flat sequentially.
The company generated $971 million of cash from operating activities in the quarter. Capital expenditures were $51 million. The company paid out dividends worth $437.7 million and repurchased shares worth $491.4 million.
Fiscal 2022 Outlook
ADP raised its fiscal 2022 outlook. The company now expects revenues to register 9-10% growth compared with the expected prior growth rate of 8-9%. Adjusted EPS is now expected to register 15-17% growth compared with the expected prior growth rate of 12-14%.
The company now expects Employer Services revenues to grow at a rate of about 7% compared with the expected prior growth rate of about 6% and PEO Services revenues to grow at a rate of 14-15% compared with the expected prior growth rate of 13% to 15%.
Equifax’s adjusted earnings of $2.22 per share beat the Zacks Consensus Estimate by 3.3% and improved 13% on a year-over-year basis. The reported figure exceeded the guided range of $2.08-$2.18.
Equifax’s revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year on a reported basis and 13% on a local-currency basis. The reported figure exceeded the guided range of $1.32-$1.34 billion.
Waste Management (WM - Free Report) reported solid first-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Waste Management’s adjusted earnings per share of $1.29 beat the Zacks Consensus Estimate by 15.2% and improved 21.7% year over year.
Waste Management’s total revenues of $4.66 billion beat the consensus estimate by 4.6% and increased 13.4% 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) Q3 Earnings Beat, '22 View Up
Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected third-quarter fiscal 2022 results.
Adjusted earnings per share of $2.21 beat the Zacks Consensus Estimate by 6.8% and grew 16.9% year over year. Total revenues of $4.51 billion beat the consensus mark by 1.2% and improved 10% year over year on a reported basis and 11% on an organic constant-currency basis.
Over the past year, shares of ADP have gained 19.1% compared with 17.4% growth of the industry it belongs to and 2.5% 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 $3 billion increased 8% on a reported basis and 9% on an organic constant-currency basis. Pays per control increased 7% year over year.
PEO Services revenues were up 14% year over year to $1.51 billion. Average worksite employees paid by PEO Services were 688,000, up 16% year over year.
Interest on funds held for clients increased 10% to $118 million. The company’s average client funds balance increased 15% to $38.1 billion. Average interest yield on client funds declined 10 basis points to 1.2%.
Margins
Adjusted EBIT increased 12% year over year to $1.2 billion. Adjusted EBIT margin grew 50 basis points to 26.8%. The uptick was backed by higher revenues, which were partially offset by the effect of increased expenses related to selling, implementation and service, and higher PEO pass-through expenses.
Employer Services segment margin increased 120 bps. PEO Services segment margin was flat.
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 2022 with cash and cash equivalents of $1.63 billion compared with $1.75 billion in the prior quarter. Long-term debt of $2.99 billion was flat sequentially.
The company generated $971 million of cash from operating activities in the quarter. Capital expenditures were $51 million. The company paid out dividends worth $437.7 million and repurchased shares worth $491.4 million.
Fiscal 2022 Outlook
ADP raised its fiscal 2022 outlook. The company now expects revenues to register 9-10% growth compared with the expected prior growth rate of 8-9%. Adjusted EPS is now expected to register 15-17% growth compared with the expected prior growth rate of 12-14%.
The company now expects Employer Services revenues to grow at a rate of about 7% compared with the expected prior growth rate of about 6% and PEO Services revenues to grow at a rate of 14-15% compared with the expected prior growth rate of 13% to 15%.
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
Omnicom Group (OMC - Free Report) reported impressive first-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Omnicom’s earnings of $1.39 per share beat the consensus mark by 8.6% and increased 4.5% year over year, driven by strong margin performance.
Omnicom’s total revenues of $3.4 billion surpassed the consensus estimate by 5.4% but declined slightly year over year.
Equifax (EFX - Free Report) reported better-than-expected first-quarter 2022 results.
Equifax’s adjusted earnings of $2.22 per share beat the Zacks Consensus Estimate by 3.3% and improved 13% on a year-over-year basis. The reported figure exceeded the guided range of $2.08-$2.18.
Equifax’s revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year on a reported basis and 13% on a local-currency basis. The reported figure exceeded the guided range of $1.32-$1.34 billion.
Waste Management (WM - Free Report) reported solid first-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Waste Management’s adjusted earnings per share of $1.29 beat the Zacks Consensus Estimate by 15.2% and improved 21.7% year over year.
Waste Management’s total revenues of $4.66 billion beat the consensus estimate by 4.6% and increased 13.4% year over year.