Automatic Data Processing
The 10-second takeaway
For the quarter ended March 31 (Q3), Automatic Data Processing met expectations on revenues and earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share grew.
Gross margins shrank, operating margins dropped, and net margins were steady.
Automatic Data Processing logged revenue of $2.92 billion. The 17 analysts polled by S&P Capital IQ predicted revenue of $2.92 billion on the same basis. GAAP reported sales were 6.8% higher than the prior-year quarter's $2.74 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.92. The 22 earnings estimates compiled by S&P Capital IQ averaged $0.91 per share. GAAP EPS of $0.92 for Q3 were 8.2% higher than the prior-year quarter's $0.85 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 51.6%, 90 basis points worse than the prior-year quarter. Operating margin was 23.1%, 30 basis points worse than the prior-year quarter. Net margin was 15.5%, about the same as the prior-year quarter.
Next quarter's average estimate for revenue is $2.65 billion. On the bottom line, the average EPS estimate is $0.54.
Next year's average estimate for revenue is $10.68 billion. The average EPS estimate is $2.75.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,070 members out of 1,130 rating the stock outperform, and 60 members rating it underperform. Among 340 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 330 give Automatic Data Processing a green thumbs-up, and 10 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 $59.03.
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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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of 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.