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) Q4 Earnings Beat, Rise Y/Y
Read MoreHide Full Article
Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results.
Adjusted earnings per share of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago quarter.
Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
Automatic Data Processing, Inc. Price, Consensus and EPS Surprise
Employer Services’ revenues of $2.78 billion increased 11% on a reported and organic constant-currency basis and beat our estimates by 1.8%. Pays per control increased 3% from the year-ago fiscal quarter’s reading.
PEO Services’ revenues were up 4% year over year to $1.46 billion, which matched our estimate. Average number of worksite employees paid by PEO Services were 722,000, up 3% from the year-ago fiscal quarter’s figure.
Interest on funds held for clients increased 86% to $235.7 million. ADP’s average client funds balance increased 3% to $34.7 billion. Average interest yield on client funds expanded 120 basis points (bps) to 2.7%.
Margins
Adjusted EBIT increased 23% from the year-ago fiscal quarter’s reading to $1 billion. Adjusted EBIT margin grew 270 bps to 22.5%.
The margin of Employer Services increased 480 bps while PEO Services’ margin declined 110 bps.
Balance Sheet and Cash Flow
ADP exited fourth-quarter fiscal 2022 with cash and cash equivalents of $2.08 billion, compared with $1.83 billion in the prior fiscal quarter. Long-term debt of $2.99 billion was flat sequentially.
Automatic Data Processing generated $1.19 billion in cash from operating activities in the quarter. Capital expenditures were $60.9 million.
FY24 Outlook
ADP expects revenues to register 6-7% growth. Adjusted earnings per share is expected to see 10-12% growth. The adjusted effective tax rate is estimated to be approximately 23%. Adjusted EBIT margin is expected to grow 60-80 bps.
Automatic Data Processing expects Employer Services revenues to grow at a rate of about 7-8%, while PEO Services revenues are expected to grow at 3-5%.
Interpublic Group of Companies (IPG - Free Report) second-quarter 2023 earnings surpassed the Zacks Consensus Estimate while revenues missed the same. Adjusted earnings (considering 6 cents from non-recurring items) came in at 74 cents per share, beating the consensus estimate by 23.3% but declining 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and decreased 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.
Equifax (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.
ManpowerGroup (MAN - Free Report) reported lower-than-expected results. Second-quarter adjusted earnings of $1.58 per share lagged the Zacks Consensus Estimate by 1.9% and declined 32.2% year over year, owing to restructuring costs and Argentina-related non-cash currency translation losses. Revenues of $4.9 billion missed the consensus mark by 0.6% and decreased 4.3% year over year on a reported basis. The same decreased 3% on a constant-currency basis.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Automatic Data Processing (ADP) Q4 Earnings Beat, Rise Y/Y
Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results.
Adjusted earnings per share of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago quarter.
Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
Automatic Data Processing, Inc. Price, Consensus and EPS Surprise
Automatic Data Processing, Inc. price-consensus-eps-surprise-chart | Automatic Data Processing, Inc. Quote
Q4 in Detail
Segments
Employer Services’ revenues of $2.78 billion increased 11% on a reported and organic constant-currency basis and beat our estimates by 1.8%. Pays per control increased 3% from the year-ago fiscal quarter’s reading.
PEO Services’ revenues were up 4% year over year to $1.46 billion, which matched our estimate. Average number of worksite employees paid by PEO Services were 722,000, up 3% from the year-ago fiscal quarter’s figure.
Interest on funds held for clients increased 86% to $235.7 million. ADP’s average client funds balance increased 3% to $34.7 billion. Average interest yield on client funds expanded 120 basis points (bps) to 2.7%.
Margins
Adjusted EBIT increased 23% from the year-ago fiscal quarter’s reading to $1 billion. Adjusted EBIT margin grew 270 bps to 22.5%.
The margin of Employer Services increased 480 bps while PEO Services’ margin declined 110 bps.
Balance Sheet and Cash Flow
ADP exited fourth-quarter fiscal 2022 with cash and cash equivalents of $2.08 billion, compared with $1.83 billion in the prior fiscal quarter. Long-term debt of $2.99 billion was flat sequentially.
Automatic Data Processing generated $1.19 billion in cash from operating activities in the quarter. Capital expenditures were $60.9 million.
FY24 Outlook
ADP expects revenues to register 6-7% growth. Adjusted earnings per share is expected to see 10-12% growth. The adjusted effective tax rate is estimated to be approximately 23%. Adjusted EBIT margin is expected to grow 60-80 bps.
Automatic Data Processing expects Employer Services revenues to grow at a rate of about 7-8%, while PEO Services revenues are expected to grow at 3-5%.
Currently, ADP carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Interpublic Group of Companies (IPG - Free Report) second-quarter 2023 earnings surpassed the Zacks Consensus Estimate while revenues missed the same. Adjusted earnings (considering 6 cents from non-recurring items) came in at 74 cents per share, beating the consensus estimate by 23.3% but declining 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and decreased 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.
Equifax (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.
ManpowerGroup (MAN - Free Report) reported lower-than-expected results. Second-quarter adjusted earnings of $1.58 per share lagged the Zacks Consensus Estimate by 1.9% and declined 32.2% year over year, owing to restructuring costs and Argentina-related non-cash currency translation losses. Revenues of $4.9 billion missed the consensus mark by 0.6% and decreased 4.3% year over year on a reported basis. The same decreased 3% on a constant-currency basis.