By Angela Chen
Automatic Data Processing Inc. posted a 9% increase in revenue
for its September quarter on new-business bookings growth.
The results beat analyst expectations.
The payroll and benefits-administration company also updated its
guidance. It now expects growth of 12% to 14%, up from 11% to 13%,
as a result of the completed spinoff of its dealer services
business, now called CDK Global Inc.
In April, the company had announced its plan to spin off the
business at a time of growing automobile demand so it could better
focus on core operations. ADP had expected the spinoff to generate
$700 million in proceeds, which it would then use to fund share
buybacks.
In the first quarter ended Sept. 30, new-business bookings for
employer services and professional-employer-organizations, or PEO,
services, which is considered a key metric for ADP, grew 11%
worldwide.
Revenue at the employer-services segment, the company's biggest
top-line contributor, rose 7% to $2.1 billion on a continuing
operations basis. PEO-services revenue from continuing operations
jumped 17.8% to $594 million.
Overall, the company reported a profit of $295.2 million, or 61
cents a share, down from $328.6 million, or 68 cents a share, a
year earlier. Total revenue rose 9% to $2.57 billion.
Analysts polled by Thomson Reuters had predicted 60 cents a
share in earnings and $2.55 billion in revenue.
Looking to the current quarter, worldwide new business bookings
are anticipated to grow about 8%.
Write to Angela Chen at angela.chen@wsj.com
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