By Erin McCarthy
Automatic Data Processing Inc. (ADP) said revenue in its fiscal
second-quarter rose 8.6%, though its profit was weighed down by
higher expenses.
The company's professional-employer-organizations services
segment led revenue growth, followed by its employer services
business.
The payroll and benefits-administration company revised its
estimates for the current fiscal year's revenue growth to an
increase of 7% to 8%, from a previous forecast of 7% growth. It
maintained its earnings forecast.
ADP's business stretches from payroll management to
employee-benefits administration and the outsourcing of
human-resources tasks. The company has posted improving core
profits in recent quarters as smaller firms that lack a formal head
of human resources seek extra help with compliance duties.
In the latest quarter ended Dec. 31, new-business bookings for
employer services and professional-employer-organizations
services--a key metric for ADP--rose 7%.
Overall, the company reported a profit of $377 million, or 78
cents a share, down from $390.9 million, or 80 cents a share, a
year earlier. Total revenue jumped 8.6% to $2.98 billion.
Analysts polled by Thomson Reuters recently projected earnings
of 77 cents a share and revenue of $2.94 billion.
Revenue at the company's employer-services segment, by far its
biggest by sales, increased 9% to $2.09 billion on a continuing
operations basis.
PEO-services revenue from continuing operations increased 14%,
while dealer-services revenue rose 7%.
The company's bottom line was dragged down a 8.8% increase in
total expenses as operating and selling and administrative expenses
climbed.
Write to Erin McCarthy at erin.mccarthy@wsj.com
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