ADP Reports Second Fiscal Quarter Results
biz.yahoo.com
Friday January 21, 8:10 am ET
Revenues Rise 9%, EPS Increases 11%
Fiscal 2005 Forecasted Revenue Growth Raised to 7 - 9%
EPS Guidance Refined to 12 - 15% Growth
ROSELAND, N.J.--(BUSINESS WIRE)--Jan. 21, 2005--Automatic Data Processing, Inc. (NYSE:ADP) reported 9% revenue growth, with revenues of $2.0 billion and $.42 earnings per share for the second fiscal quarter ended December 31, 2004, Arthur F. Weinbach, chairman and chief executive officer, announced today. Pretax and net earnings both increased 9% compared with the second quarter last year. Diluted earnings per share, on fewer shares outstanding, increased 11% from $.38 per share last year, the first double-digit earnings per share increase in eight quarters.
Commenting on the quarter, Mr. Weinbach said, "We are pleased with our results as there is positive momentum in each of our businesses. Revenues in Employer Services increased 7% based on solid growth in the new business started in the quarter, the number of employees on our clients' payrolls and client fund balances. New business sales growth was 8% in the second quarter and 11% for the first half compared with last year, and we remain confident in our double-digit sales growth forecast for the year. Although the critical year-end retention period is still ahead of us, we are very pleased with our results for the first half which are .7% ahead of last year's record levels.
"Brokerage Services' revenues grew 4% in the quarter compared with the second quarter last year. Our internal revenue growth rate was 10% after adjusting for last year's divestitures. Investor communications mailings increased 18% over last year driven by increased mutual fund meeting activity. Back-office average trades per day increased 18% over last year, while average revenue per trade declined 15% primarily due to mix changes. Our acquisition of the U.S. Clearing and BrokerDealer Services divisions of Bank of America was completed on November 1, 2004. Revenues for this new reportable segment, Securities Clearing and Outsourcing Services, were $15 million in the quarter and we anticipate about $.02 per share dilution in fiscal 2005 from this transaction. Dealer Services' revenues grew 11% and Claims Services' revenues grew 6% in the quarter compared with the second quarter last year.
"Our results for the first half of the fiscal year have been positive. This quarter was the first in more than three years in which the yield on our investment portfolio exceeded the same quarter in the previous year. We are encouraged by our business momentum and product position coupled with the improving economic conditions, the trend in labor statistics and the increase in total brokerage trade volumes. Our revenue guidance has been increased to 7% to 9% growth and we are refining our earnings estimate to between 12% and 15% earnings per share growth. We are optimistic about the market opportunities for future growth," Mr. Weinbach concluded. |
