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Automatic Data Processing (ADP) Q1 Earnings and Revenues Top
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Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected first-quarter fiscal 2023 results.
Adjusted earnings per share (excluding a penny from non-recurring items) of $1.86 beat the Zacks Consensus Estimate by 4.5% and grew 12.7% from the year-ago fiscal quarter’s reading Total revenues of $4.22 billion beat the consensus mark by 1.5% and improved 10% From the year-ago fiscal quarter’s reading on a reported basis and 11% on an organic constant-currency basis.
Over the past year, shares of ADP have gained 10.7% compared with 0.1% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Let’s check out the numbers in detail:
Segments in Detail
Employer Services revenues of $2.8 billion increased 9% on a reported basis and 11% on an organic constant-currency basis. Pays per control increased 6% from the year-ago fiscal quarter’s reading.
PEO Services revenues were up 13% year over year to $1.43 billion. Average worksite employees paid by PEO Services were 704,000, up 12% from the year-ago fiscal quarter’s reading.
Interest on funds held for clients increased 39% to $141 million. ADP’s average client funds balances increased 9% to $29.4 billion. Average interest yield on client funds expanded 40 basis points to 1.9%.
Automatic Data Processing, Inc. Price, Consensus and EPS Surprise
ADP exited first-quarter fiscal 2022 with cash and cash equivalents of $1.21 billion compared with $1.44 billion in the prior fiscal quarter. Long-term debt of $2.99 billion was flat sequentially.
Automatic Data Processing generated $718.1 million of cash from operating activities in the quarter. Capital expenditures were $45.4 million. ADP paid out dividends worth $432.9 million and repurchased shares worth $333.3 million.
Fiscal 2023 Outlook
ADP expects revenues to register 8-9% growth (prior view: 7-9% growth). Adjusted EPS is now expected to register 15-17% growth (prior view: 13-16%). Adjusted effective tax rate is estimated to be approximately at 23%. Automatic Data Processing expects Employer Services revenues to grow at a rate of about 7-8% (prior view: 6-8%), while PEO Services revenues are still expected to grow at 10-12% rate.
Omnicom Group Inc. (OMC - Free Report) reported impressive third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.
Equifax Inc. (EFX - Free Report) reported stellar third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Adjusted earnings (excluding 39 cents from non-recurring items) of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. However, revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year on a reported basis and 4% on a local-currency basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported better-than-expected third-quarter 2022 results.
Adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been constant over the past year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.
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Automatic Data Processing (ADP) Q1 Earnings and Revenues Top
Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected first-quarter fiscal 2023 results.
Adjusted earnings per share (excluding a penny from non-recurring items) of $1.86 beat the Zacks Consensus Estimate by 4.5% and grew 12.7% from the year-ago fiscal quarter’s reading Total revenues of $4.22 billion beat the consensus mark by 1.5% and improved 10% From the year-ago fiscal quarter’s reading on a reported basis and 11% on an organic constant-currency basis.
Over the past year, shares of ADP have gained 10.7% compared with 0.1% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Let’s check out the numbers in detail:
Segments in Detail
Employer Services revenues of $2.8 billion increased 9% on a reported basis and 11% on an organic constant-currency basis. Pays per control increased 6% from the year-ago fiscal quarter’s reading.
PEO Services revenues were up 13% year over year to $1.43 billion. Average worksite employees paid by PEO Services were 704,000, up 12% from the year-ago fiscal quarter’s reading.
Interest on funds held for clients increased 39% to $141 million. ADP’s average client funds balances increased 9% to $29.4 billion. Average interest yield on client funds expanded 40 basis points to 1.9%.
Automatic Data Processing, Inc. Price, Consensus and EPS Surprise
Automatic Data Processing, Inc. price-consensus-eps-surprise-chart | Automatic Data Processing, Inc. Quote
Margins
Adjusted EBIT increased 11% from the year-ago fiscal quarter’s reading to $1 billion. Adjusted EBIT margin grew 30 basis points to 24.1%.
Employer Services segment margin increased 50 bps. PEO Services segment margin surged 80 bps.
Balance Sheet and Cash Flow
ADP exited first-quarter fiscal 2022 with cash and cash equivalents of $1.21 billion compared with $1.44 billion in the prior fiscal quarter. Long-term debt of $2.99 billion was flat sequentially.
Automatic Data Processing generated $718.1 million of cash from operating activities in the quarter. Capital expenditures were $45.4 million. ADP paid out dividends worth $432.9 million and repurchased shares worth $333.3 million.
Fiscal 2023 Outlook
ADP expects revenues to register 8-9% growth (prior view: 7-9% growth). Adjusted EPS is now expected to register 15-17% growth (prior view: 13-16%). Adjusted effective tax rate is estimated to be approximately at 23%.
Automatic Data Processing expects Employer Services revenues to grow at a rate of about 7-8% (prior view: 6-8%), while PEO Services revenues are still expected to grow at 10-12% rate.
Currently, ADP carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Releases
Omnicom Group Inc. (OMC - Free Report) reported impressive third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.
Equifax Inc. (EFX - Free Report) reported stellar third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Adjusted earnings (excluding 39 cents from non-recurring items) of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. However, revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year on a reported basis and 4% on a local-currency basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported better-than-expected third-quarter 2022 results.
Adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been constant over the past year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.