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published in Blogs
May 02, 2022
ADP (ADP. $218.18) beats fiscal Q3 earnings expectations

ADP (ADP. $218.18) beats fiscal Q3 earnings expectations

Automatic Data Processing, Inc.  posted  third-quarter fiscal 2022 results that were better than expected by the Zacks Consensus Estimate.

The payroll and HR services company’s adjusted earnings climbed +16.9% from the year-ago quarter to $2.21 a share, surpassing the Zacks Consensus Estimate by 6.8%.

Total revenues of $4.51 billion beat the consensus mark by 1.2% and grew +10% year over year on a reported basis and +11% on an organic constant-currency basis.

Employer Services revenues increased 8% on a reported basis and 9% on an organic constant-currency basis.  PEO Services revenues grew 14% year over year to $1.51 billion. Average worksite employees paid by PEO Services were 688,000, up 16% year over year.

Adjusted EBIT rose +12% year over year to $1.2 billion. Adjusted EBIT margin expanded 50 basis points to 26.8%, on the back of higher revenues, which were partially offset by increased expenses related to selling, implementation and service, and higher PEO pass-through expenses.

For fiscal 2022, ADP now expects revenues to experience 9-10% growth compared with prior forecast of 8-9%. Adjusted EPS forecast is 15-17% growth compared with the expected prior growth rate of 12-14%.

The company now expects Employer Services revenues growth at a rate of about 7% compared with the expected prior growth rate of about 6%. It projects PEO Services revenues growth of 14-15% compared with prior expectation of 13% to 15%.

Related Tickers: ADP