Automatic Data Processing Results Miss Expectations

   By Chelsey Dulaney 
 

Automatic Data Processing Inc. on Thursday reported weaker-than-expected results for its June quarter, though the payroll and benefits-administration company offered guidance for its new fiscal year mostly above Wall Street expectations.

For the fiscal year ending next June, ADP forecast per-share earnings growth of 12% to 14%, while analysts had forecast 12% growth, according to Thomson Reuters.

The company expects its revenue to grow 7% to 9%, while analysts had forecast 7% growth. The guidance includes a negative impact of one to two percentage points from currency.

In the latest quarter, ADP said better-than-expected new business bookings resulted in higher selling expenses, pressuring margins and earnings growth. World-wide new-business bookings, a key metric, grew 18%.

Revenue at the employer-services segment, the company's biggest top-line contributor, grew 2.1% to $2.18 billion on a continuing operations basis.

Revenue from professional-employer-organizations services jumped 16% to $678 million.

Overall, the company reported a profit of $336.2 million, or 72 cents a share, compared with $288.7 million, or 60 cents a share, a year earlier. Per-share earnings from continuing operations were 55 cents.

Total revenue grew 5% to $2.69 billion.

Analysts polled by Thomson Reuters had predicted 59 cents a share in earnings and $2.74 billion in revenue.

Write to Chelsey Dulaney at [e-mail]

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