Automatic Data Processing (Nasdaq: ADP) reported earnings on Jan. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Automatic Data Processing met expectations on revenues and beat slightly on earnings per share.

Compared to the prior-year quarter, revenue increased and earnings per share increased significantly.

Gross margins shrank, operating margins dropped, and net margins increased.

Revenue details
Automatic Data Processing reported revenue of $2.6 billion. The 16 analysts polled by S&P Capital IQ expected to see revenue of $2.6 billion. Sales were 7.4% higher than the prior-year quarter's $2.4 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.69. The 20 earnings estimates compiled by S&P Capital IQ predicted $0.68 per share on the same basis. GAAP EPS of $0.76 for Q2 were 23% higher than the prior-year quarter's $0.62 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 49.4%, 180 basis points worse than the prior-year quarter. Operating margin was 18.8%, 10 basis points worse than the prior-year quarter. Net margin was 14.5%, 160 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.9 billion. On the bottom line, the average EPS estimate is $0.93.

Next year's average estimate for revenue is $10.7 billion. The average EPS estimate is $2.74.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,052 members out of 1,112 rating the stock outperform, and 60 members rating it underperform. Among 380 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 369 give Automatic Data Processing a green thumbs-up, and 11 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 $55.38.

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