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Automatic Data Processing Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 7, 2012 04:11PM

Automatic Data Processing Inc. (ADP) filed Quarterly Report for the period ended 2011-12-31. Automatic Data Processing Inc. has a market cap of $26.94 billion; its shares were traded at around $55.125 with a P/E ratio of 21 and P/S ratio of 2.7. The dividend yield of Automatic Data Processing Inc. stocks is 2.9%. Automatic Data Processing Inc. had an annual average earning growth of 3.7% over the past 10 years. GuruFocus rated Automatic Data Processing Inc. the business predictability rank of 3-star.



Highlight of Business Operations:

Total revenues increased $177.3 million, or 7%, to $2,583.0 million for the three months ended December 31, 2011, from $2,405.7 million for the three months ended December 31, 2010, due to an increase in revenues in Employer Services of 7%, or $119.9 million, to $1,827.1 million, PEO Services of 16%, or $55.6 million, to $413.8 million, and Dealer Services of 7%, or $26.6 million, to $412.6 million. Total revenues would have increased approximately 6% without the impact of recently completed acquisitions.

Total revenues increased $470.3 million, or 10%, to $5,105.5 million for the six months ended December 31, 2011, from $4,635.2 million for the six months ended December 31, 2010, due to an increase in revenues in Employer Services of 8%, or $271.0 million, to $3,577.5 million, PEO Services of 16%, or

Operating expenses increased $134.1 million, or 11%, for the three months ended December 31, 2011, as compared to the three months ended December 31, 2010 due to the increase in revenues described above, including the increases in PEO Services, which has pass-through costs that are re-billable and which includes costs for benefits coverage, workers compensation coverage and state unemployment taxes for worksite employees. These pass-through costs were $314.9 million for the three months ended December 31, 2011, which included costs for benefits coverage of $261.9 million and costs for workers compensation and payment of state unemployment taxes of $53.0 million. These pass-through costs were $270.3 million for the three months ended December 31, 2010, which included costs for benefits coverage of $229.6 million and costs for workers compensation and payment of state unemployment taxes of $40.7 million. The increase in operating expenses is also due to operating expenses related to businesses acquired of $23.5 million and higher expenses in Employer Services of $13.6 million related to increased headcount related to client service associates.

Operating expenses increased $310.0 million, or 14%, for the six months ended December 31, 2011, as compared to the six months ended December 31, 2010 due to the increase in revenues described above, including the increases in PEO Services, which has pass-through costs that are re-billable and which includes costs for benefits coverage, workers compensation coverage and state unemployment taxes for worksite employees. These pass-through costs were $623.2 million for the six months ended December 31, 2011, which included costs for benefits coverage of $516.7 million and costs for workers compensation and payment of state unemployment taxes of $106.5 million. These pass-through costs were $530.7 million for the six months ended December 31, 2010, which included costs for benefits coverage of $452.2 million and costs for workers compensation and payment of state unemployment taxes of $78.2 million. The increase in operating expenses is also due to operating expenses related to businesses acquired of $70.8 million and higher expenses in Employer Services of $25.4 million related to increased headcount for client service associates. Additionally, operating expense increased $23.7 million due to changes in foreign currency exchange rates.

Net earnings increased $89.1 million, or 15%, to $677.7 million for the six months ended December 31, 2011 as compared to $588.6 million for the six months ended December 31, 2010 and includes an after-tax gain on the sale of assets of $41.2 million. Diluted earnings per share increased 16% to $1.38 for the six months ended December 31, 2011 as compared to $1.19 for the six months ended December 31, 2010. The increase in diluted earnings per share for the six months ended December 31, 2011 reflects the increase in net earnings and the impact of fewer shares outstanding as a result of the repurchase of approximately 6.2 million shares during the six months ended December 31, 2011 and the repurchase of 14.2 million shares in the fiscal year ended June 30, 2011.

Read the The complete Report



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