Automatic Data Processing Inc.'s (ADP) fiscal third-quarter
earnings rose 0.3% as the number of workers on clients' payrolls
continued to fall and pricing pressures remained.
The global payroll-processing and human-resources outsourcing
company, with about 570,000 clients, late last year grew optimistic
on signs of a stabilizing economy and a slowing pace of job losses.
However, while the number of mass layoffs has declined from last
year, the U.S. unemployment rate has remaining stubbornly high.
President and Chief Executive Gary C. Butler said the selling
environment was showing signs of improvement at its employer
services and human-resources outsourcing segments. The decline in
pays-per-control, an important measure of profitability for
payroll-processing companies, has slowed from a year earlier.
For the quarter ended March 31, ADP reported a profit of $403.6
million, up from $402.5 million. Earnings per share were flat at 80
cents. Revenue increased 3% to $2.44 billion, largely on currency
changes.
Analysts polled by Thomson Reuters most recently forecast
earnings of 78 cents on revenue of $2.4 billion.
Gross margin fell to 45.5% from 48.7%, but that was offset by
lower overhead costs.
Revenue at ADP's employer-services segment, by far its largest,
rose 1%. In the U.S., revenue declined 3% at ADP's traditional
payroll business but rose 8% at its "beyond payroll" segment.
Employees on clients' payrolls were up 2.5%.
The company's smaller human resources segment saw revenue jump
15% as the number of employees on clients' payrolls rose 5%.
Shares of ADP closed Monday at $45.33 and were inactive
premarket. The stock is up 5.9% this year, less than the broader
market.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com;