DOW JONES NEWSWIRES 
 

Automatic Data Processing (ADP)'s fiscal second-quarter net income rose 3.2% despite weakened sales conditions amid uncertainty about the length and depth of the U.S. recession.

Shares of the largest company in the $70 billion global-payroll processing market were up 6.7% at $39.10 in recent premarket trading.

For the quarter ended Dec. 31, ADP reported net income increased to $300.5 million, or 59 cents a share, from $291.2 million, or 55 a share, a year earlier.

Revenue rose 2.5% to $2.2 billion; the gain would have been double that absent the strengthening dollar.

Analysts polled by Thomson Reuters were looking for earnings of 56 cents a share on revenue of $2.18 billion.

Revenue rose 6% at ADP's employer-services business, by far its biggest business, which includes its payroll services. Pretax earnings from continuing operations rose 13% despite the number of employees on U.S. clients payrolls falling 0.6%. Global client retention decreased 0.5% for the year amid price sensitivity and an increasing number of clients going out of business.

At its dealer-services division - the only remaining nonpayroll unit - revenue fell 1%, amid continued auto-dealership consolidations and closings in the U.S. while earnings rose 1%.

ADP's human-resources outsourcing business saw revenue and profit each rise 14% as the average number of worksite employees paid increased 13% to 193,000.

ADP, which reiterated its fiscal-year outlook, last fall expected it would be able to cut costs by shifting workers to more inexpensive locations in the U.S. and abroad. It also viewed the environment as an opportunity to look for acquisitions and expand its core business, as opposed to diversifying.

-By Tess Stynes, Dow Jones Newswires; 201-938-2473; tess.stynes@dowjones.com

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