DOW JONES NEWSWIRES 
 

Automatic Data Processing Inc. (ADP) reported Monday that its fiscal third-quarter earnings fell 2.7% as rising unemployment resulted in fewer workers at its clients' businesses.

While joblessness has been steadily increasing, there has been a lag in its effects on payroll-processing companies like ADP, which also provide other services such as benefits processing and human-resources outsourcing.

For the quarter ended March 31, the global payroll-processing company reported a profit of $402.5 million, or 80 a share, down from $413.6 million, or 79 cents a share, a year earlier. The prior year included earnings of 2 cents a share at discontinued operations.

Revenue decreased 2% to $2.37 billion, with the stronger dollar reducing revenue by three percentage points.

Analysts polled by Thomson Reuters most recently were looking for earnings of 80 cents on revenue of $2.39 billion.

Gross margin fell to 48.7% from 49.6%.

At its employer-services business, by far its largest, revenue increased a lower-than-expected 1%. Employees on U.S. clients' payrolls were down 4.2%.

Combined new business sold in its employer-services and human-resources benefits outsourcing businesses fell 10%. The results are combined as some clients use both services. Its smaller human-resources outsourcing business was a bright spot, with revenue up 10% amid growth in employees on clients' payrolls.

Shares of ADP, which affirmed its 2009 earnings forecast, closed at $34.86 on Monday and didn't trade premarket.

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