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American Data Processing (Nasdaq: ADP ) is probably best known for the monthly job numbers that it puts out every month. But ADP is a bit more than a company that tracks the trends in employment in this country. They are one of the largest providers of human resources solutions, offering various suites of services to companies of various sizes. Their reach -- over 600,000 clients and $10 billion in revenue -- is what allows them to track the trends in employment numbers every month, but this week it will be in the news for releasing earnings from the first quarter of its fiscal year 2013. Here are some things to keep an eye on in the earnings.
What analysts are expecting
Analysts expect to see earnings of $0.62 per share on revenues of $2.63 billion for the quarter. These would both be slight increases over the same quarter last year, which checked in at $0.61 and $2.52 billion, respectively. Income has increased each of the previous three quarters, something that the company hopes will continue going forward.
What else to watch for
With employment numbers continuing to improve, there may be a larger need for ADP's services going forward, so expect them to mention this as well. If the past is any indication, the performance of ADP and rival Paychex (Nasdaq: PAYX ) aren't terribly affected by weak jobs reports, so I would anticipate that stronger jobs numbers would make it even better for them.
Outside of its earnings release, this week also marks the debut of the "newly enhanced" ADP National Employment Report. Teaming up with Moody's (NYSE: MCO ) Analytics, the new report will expand the number of industry categories and the number of business sizes reported each month, hopefully getting its numbers to better align with the official employment numbers from the Bureau of Labor Statistics. While these new enhancements may not have a direct impact on the bottom line, they should increase the notoriety of ADP, potentially leading to increased business in the future.
Looking for another stock that's an indicator of booms or bust in employment? Though in a different industry entirely from ADP, Caterpillar is a company that many investors watch to keep an eye on the changing economic landscape both here and abroad. If you want to follow along, you can read all about Caterpillar's strengths and weaknesses in our brand new report. Just click here to access it now.