DOW JONES NEWSWIRES
Automatic Data Processing Inc.'s (ADP) fiscal second-quarter
profit rose 21% as stronger demand for its outsourcing services
helped the payroll and benefits-administration company book
improved revenue.
Widely recognized for its stamp on worker paychecks, ADP also
aims to offer companies a slew of services beyond payroll
management, including benefits administration and human resources
outsourcing. Recent quarters have seen some of the company's
strongest growth in new customers from small to medium-sized
firms.
For the latest quarter, the company said new-business sales for
employer services and professional employer organizations
services--a key metric for ADP--jumped 14% from a year earlier.
"We moved into the second half of fiscal 2012 with solid
performance and good key business metrics in a somewhat mixed
economic environment," said Chief Executive Carlos A. Rodriguez.
"We anticipate that continued low interest rates will further
pressure margins and earnings throughout the remainder of the
fiscal year." Rodriguez took the company helm last year following
the departure of former CEO Gary C. Butler.
For the quarter ended Dec. 31, ADP reported a profit of $375
million, or 76 cents a share, up from a year-earlier profit of
$310.1 million, or 62 cents. Stripping out an 8-cent per-share
benefit related to the sale of certain assets, the company reported
a per-share profit of 68 cents for the quarter, meeting analyst
expectations.
Total revenue improved 7.4% to $2.58 billion, also matching
analyst estimates.
Gross margin narrowed to 41.2% from 42.6% a year earlier.
Revenue at the company's employer-services segment, by far its
biggest by sales, rose 7% to $1.83 billion.
The number of employees on ADP's clients' payrolls in the U.S.
rose 2.8% during the period.
Shares closed Tuesday at $56.73 and were inactive premarket. The
stock is up 14% over the past 12 months.
--By Mia Lamar, Dow Jones Newswires; 212-416-3207;
mia.lamar@dowjones.com