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 Estimates
Read MoreHide Full Article
Automatic Data Processing, Inc. (ADP - Free Report) has reported impressive fourth-quarter fiscal 2024 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
ADP’s earnings per share of $2.1 beat the consensus estimate by 1% and increased 10.6% from the year-ago quarter. Total revenues of $4.8 billion surpassed the consensus estimate by a slight margin and grew 6.5% from the year-ago quarter.
The ADP stock has gained 10.6% over the year-to-date period, outperforming the 9.2% rally of the industry it belongs to.
Automatic Data Processing, Inc. Price and EPS Surprise
Employer Services’ revenues of $3.2 billion grew 7% on a reported basis and 7% at constant currency, meeting our estimate. Pays per control increased 2% from the year-ago quarter.
PEO Services’ revenues rose 6% from the year-ago quarter to $1.6 billion and surpassed our expectation of $1.5 billion for the fourth quarter of fiscal 2024. Average worksite employees paid by PEO Services were 729,000, growing 3% from the year-ago quarter.
Interest on funds held for clients rose 17% from the year-ago quarter to $227 million and missed our estimate of $257.9 million. ADP’s average client funds balance grew 4% to $36.1 billion. Average interest yield on client funds expanded 30 basis points to 3.1%.
Margins
Adjusted EBIT increased 9% on a year-over-year basis to $4.9 billion. The adjusted EBIT margin grew 70 basis points (bps) to 25.5%.
The margin of Employer Services increased 220 bps, while PEO Services declined 240 bps.
Balance Sheet & Cash Flow
ADP exited fourth-quarter fiscal 2024 with cash and cash equivalents of $2.9 billion compared with $3.3 billion reported at the end of the preceding quarter. The long-term debt of $3 billion was flat with the preceding quarter.
Automatic Data Processing generated $1.3 billion in cash from operating activities in the quarter.
FY25 Outlook
For 2024, ADP has reduced its guidance for revenue growth to 5-6% from the 6-7% mentioned previously. The adjusted EPS growth guidance is lowered to 8-10% from the 10-12% stated earlier. The adjusted effective tax rate is estimated to be 23%. The adjusted EBIT margin is updated to 60-80 bps from the 60-70 bps mentioned previously.
Automatic Data Processing has reduced its guidance for Employer Services revenue growth to 5-6% compared with the 7-8% mentioned previously. The guidance for PEO Services’ revenue growth is pegged at 4-6%, whereas it reported a rise of 3-4% in the preceding quarter.
S&P Global Inc. (SPGI - Free Report) reported impressive second-quarter 2024 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
SPGI’s adjusted EPS (excluding 82 cents from non-recurring items) of $4.04 surpassed the Zacks Consensus Estimate by 10.1% and increased 29.5% year over year. Revenues of $3.5 billion beat the consensus estimate by 3.4% and improved 14.5% year over year.
IT’s adjusted earnings (excluding 28 cents from non-recurring items) per share of $3.22 beat the Zacks Consensus Estimate by 6.3% and increased 13% from the year-ago quarter. Revenues of $1.6 billion beat the consensus estimate marginally and improved 6.1% year over year.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Automatic Data Processing (ADP) Q4 Earnings Beat Estimates
Automatic Data Processing, Inc. (ADP - Free Report) has reported impressive fourth-quarter fiscal 2024 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
ADP’s earnings per share of $2.1 beat the consensus estimate by 1% and increased 10.6% from the year-ago quarter. Total revenues of $4.8 billion surpassed the consensus estimate by a slight margin and grew 6.5% from the year-ago quarter.
The ADP stock has gained 10.6% over the year-to-date period, outperforming the 9.2% rally of the industry it belongs to.
Automatic Data Processing, Inc. Price and EPS Surprise
Automatic Data Processing, Inc. price-eps-surprise | Automatic Data Processing, Inc. Quote
Segmental Results
Employer Services’ revenues of $3.2 billion grew 7% on a reported basis and 7% at constant currency, meeting our estimate. Pays per control increased 2% from the year-ago quarter.
PEO Services’ revenues rose 6% from the year-ago quarter to $1.6 billion and surpassed our expectation of $1.5 billion for the fourth quarter of fiscal 2024. Average worksite employees paid by PEO Services were 729,000, growing 3% from the year-ago quarter.
Interest on funds held for clients rose 17% from the year-ago quarter to $227 million and missed our estimate of $257.9 million. ADP’s average client funds balance grew 4% to $36.1 billion. Average interest yield on client funds expanded 30 basis points to 3.1%.
Margins
Adjusted EBIT increased 9% on a year-over-year basis to $4.9 billion. The adjusted EBIT margin grew 70 basis points (bps) to 25.5%.
The margin of Employer Services increased 220 bps, while PEO Services declined 240 bps.
Balance Sheet & Cash Flow
ADP exited fourth-quarter fiscal 2024 with cash and cash equivalents of $2.9 billion compared with $3.3 billion reported at the end of the preceding quarter. The long-term debt of $3 billion was flat with the preceding quarter.
Automatic Data Processing generated $1.3 billion in cash from operating activities in the quarter.
FY25 Outlook
For 2024, ADP has reduced its guidance for revenue growth to 5-6% from the 6-7% mentioned previously. The adjusted EPS growth guidance is lowered to 8-10% from the 10-12% stated earlier. The adjusted effective tax rate is estimated to be 23%. The adjusted EBIT margin is updated to 60-80 bps from the 60-70 bps mentioned previously.
Automatic Data Processing has reduced its guidance for Employer Services revenue growth to 5-6% compared with the 7-8% mentioned previously. The guidance for PEO Services’ revenue growth is pegged at 4-6%, whereas it reported a rise of 3-4% in the preceding quarter.
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
S&P Global Inc. (SPGI - Free Report) reported impressive second-quarter 2024 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
SPGI’s adjusted EPS (excluding 82 cents from non-recurring items) of $4.04 surpassed the Zacks Consensus Estimate by 10.1% and increased 29.5% year over year. Revenues of $3.5 billion beat the consensus estimate by 3.4% and improved 14.5% year over year.
Gartner, Inc. (IT - Free Report) reported better-than-expected second-quarter 2024 results.
IT’s adjusted earnings (excluding 28 cents from non-recurring items) per share of $3.22 beat the Zacks Consensus Estimate by 6.3% and increased 13% from the year-ago quarter. Revenues of $1.6 billion beat the consensus estimate marginally and improved 6.1% year over year.