ADP Reports Third Fiscal Quarter Results
biz.yahoo.com
Thursday April 21, 8:10 am ET
Revenues Grow 11%, EPS Increases 14%
ROSELAND, N.J.--(BUSINESS WIRE)--April 21, 2005--Automatic Data Processing, Inc. reported 11% revenue growth, with revenues of $2.3 billion and $0.57 earnings per share for the third fiscal quarter ended March 31, 2005, Arthur F. Weinbach, chairman and chief executive officer, announced today. Pretax and net earnings grew 12% and 13%, respectively, compared with the third quarter last year. Diluted earnings per share, on fewer shares outstanding, increased 14% from $0.50 per share last year.
Commenting on the results, Mr. Weinbach said, "The positive momentum in each of our businesses continued in our third fiscal quarter. Employer Services' revenues increased 9%, and key metrics continued to improve. New business sales growth accelerated to 16% in the quarter and client retention increased nearly a full percentage point year-to-date on top of last year's record level, a testament to the quality of our products and the World Class Service we provide to our clients on a daily basis. Our client fund balances exceeded our expectations during the quarter when we have our largest average daily balances, with double-digit growth compared with the third quarter last year. We are particularly pleased with the progress in Employer Services as the results of our investments in sales and new products are now more evident across all of our market segments.
"Brokerage Services' revenues grew 5% and pretax earnings grew 4% in the quarter compared with the third quarter last year. Our internal revenue growth rate was 9% for the quarter. Our Brokerage Services' revenue growth was primarily driven by growth in investor communications which resulted in a slightly lower overall margin. The volume of investor communications pieces delivered increased 25% over last year largely driven by more mutual fund meetings and mutual fund special communications. Back-office average trades per day increased 5% over strong volumes last year, while the decline in average revenue per trade was 8% for the quarter. Securities Clearing and Outsourcing Services' revenues were $22 million in the quarter and the pretax loss of $9 million for the quarter was in line with our expectations.
"Dealer Services' revenues grew 9% in the quarter while our pretax earnings declined by 7%. Our sales results for our core dealer management systems (DMS) have been solid this year, and we have recently been awarded new sales contracts to be the sole DMS provider for two of the largest dealership groups in the United States. This will result in about 240 additional dealer sites over the next 18 to 30 months. As we have invested in additional implementation resources, our margins will be lower initially and should improve next year. Additionally, our margins have been impacted by integration expenses relating to last year's acquisitions. Claims Services' revenues grew 3% in the quarter compared with the third quarter last year. In addition, we continued to benefit from foreign exchange rates which contributed about 1% to total company revenue growth year-to-date.
"We are pleased with the results of the third quarter. Our confidence is high that we will end the year toward the high end of our total company guidance of 7% - 9% revenue growth and 12% - 15% earnings per share growth. We continue to invest in areas of the business that provide strong future growth opportunities, such as Comprehensive Outsourcing Services solutions for all segments, new distribution channels and our salesforce. We acquired over 10 million ADP shares for treasury year-to-date for approximately $420 million," Mr. Weinbach concluded. |
