Golf Clap for Automatic Data Processing

Seth Jayson, The Motley Fool
Updated

Automatic Data Processing (NAS: ADP) reported earnings on May 3. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended March 31 (Q3), Automatic Data Processing met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue grew. GAAP earnings per share grew.


Gross margins expanded, operating margins grew, net margins shrank.

Revenue details
 Automatic Data Processing reported revenue of $3.11 billion. The 20 analysts polled by S&P Capital IQ wanted to see revenue of $3.11 billion on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $2.79 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.99. The 25 earnings estimates compiled by S&P Capital IQ averaged $0.98 per share. GAAP EPS of $0.99 for Q3 were 7.6% higher than the prior-year quarter's $0.92 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 51.3%, 200 basis points better than the prior-year quarter. Operating margin was 22.9%, 260 basis points better than the prior-year quarter. Net margin was 15.5%, 70 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $2.82 billion. On the bottom line, the average EPS estimate is $0.58.

Next year's average estimate for revenue is $11.31 billion. The average EPS estimate is $2.91.

Investor sentiment
 The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,095 members out of 1,156 rating the stock outperform, and 61 members rating it underperform. Among 400 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 391 give Automatic Data Processing a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Automatic Data Processing is outperform, with an average price target of $63.55.

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The article Golf Clap for Automatic Data Processing originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Automatic Data Processing. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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