Automatic Data Processing, Inc. posted second-quarter fiscal 2023 earnings that exceeded analysts’ expectations.
The human resources management company’s adjusted earnings per share for the quarter grew +19% from the year-ago quarter to $1.96, surpassing the Zacks Consensus Estimate by 0.5% (according to Zacks Equity Research).
Total revenues were up +9.1% year-over-year to $4.4 billion, topping the Zacks Consensus Estimate by +0.3%.
Employer Services’ revenues rose +8% year-over-year on a reported basis and +10% on an organic constant-currency basis. Pays per control climbed +5% from the year-ago fiscal quarter.
PEO Services’ revenues grew +11% year over year to $1.5 billion. Average worksite employees paid by PEO Services rose +8% year-over-year to 711,000.
Interest on funds held for clients grew +77% to $187 million. Average client funds balance increased 4% to $33.4 billion, while average interest yield on client funds widened 90 basis points to 2.2%.
For fiscal 2023, ADP reaffirmed expectations of revenues growth of 8-9%. Adjusted EPS is still expected to increase 15-17%. Adjusted effective tax rate is estimated to be around 23%.
The company projects Employer Services revenues growth of about 8-9%, higher than prior outlook of 7-8%. It continues to expect PEO Services revenues to grow at 8-9% rate vs. prior estimate of 10-12%.
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where ADP advanced for three days, in of 328 cases, the price rose further within the following month. The odds of a continued upward trend are .
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