Automatic Data (ADP) Q4 Earnings Beat on Segmental Performance
Automatic Data Processing ADP delivered robust results in the fourth quarter of fiscal 2024, driven by broad-based strengths in employer services with exceptional new business bookings, better-than-expected retention and stable pay-per-control growth.
Automatic Data Processing, Inc. Price and EPS Surprise
Automatic Data Processing, Inc. price-eps-surprise | Automatic Data Processing, Inc. Quote
ADP’s earnings per share of $2.1 surpassed the consensus mark by 1%. It increased 10.6% on a year-over-year basis. The company’s revenues of $4.8 billion surpassed the Zacks Consensus Estimate by a slight margin. The top line gained 6.5% from the year-ago quarter.
The employer services revenues were $3.2 billion, up 7% year over year on a reported basis and 7% on a constant-currency basis. This metric met our estimate, marking 6.2% growth from the year-ago quarter. New business bookings grew to $2 billion, increasing 7% from the year-ago quarter. Client retention declined to 92% from 92.2% in the year-ago quarter. Pays per control rose 2% on a year-over-year basis. This segment’s margin increased 220 basis points (bps) year over year.
The PEO Services segment’s revenues were $1.6 billion, gaining 6% from the year-ago quarter. This compares favorably with our estimate of $1.5 billion, implying 3.5% growth on a year-over-year basis. Average worksite employees paid by PEO Services amounted to 742,000, increasing 3% on a year-over-year basis. This segment’s margin decreased by 240 bps from the year-ago quarter.
The Interest on funds held for clients was $227 million, up 17% year over year. This, however, compares unfavorably with our revenue estimate of $257.9 million, which had suggested 5.7% year-over-year growth. Average client funds balances grew 4% to $36.1 billion from the year-ago quarter. The average interest yield on client funds rose 30 bps year over year to 3.1%.
Currently, ADP carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots
Verisk Analytics VRSK reported mixed second-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
VRSK posted adjusted earnings of $1.7 per share, surpassing the consensus estimate by 6.8%. The metric grew 15.2% year over year.
Total revenues of $716.8 million missed the consensus estimate marginally. The top line increased 6.2% on a year-over-year basis.
The Interpublic Group of Companies IPG reported mixed second-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
IPG reported an adjusted EPS of 61 cents, meeting the Zacks Consensus Estimate and increasing 17.6% from the year-ago quarter.
The top line amounted to $2.3 billion, which surpassed the consensus estimate by a slight margin but declined 12.7% year over year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
Interpublic Group of Companies, Inc. (The) (IPG) : Free Stock Analysis Report
Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report