Automatic Data Processing
The 10-second takeaway
For the quarter ended Sep. 30 (Q1), Automatic Data Processing met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share grew.
Margins contracted across the board.
Revenue details
Automatic Data Processing booked revenue of $2.64 billion. The 19 analysts polled by S&P Capital IQ hoped for revenue of $2.63 billion on the same basis. GAAP reported sales were 4.6% higher than the prior-year quarter's $2.52 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 $0.62. The 22 earnings estimates compiled by S&P Capital IQ averaged $0.62 per share. GAAP EPS of $0.63 for Q1 were 3.3% higher than the prior-year quarter's $0.61 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 48.2%, 60 basis points worse than the prior-year quarter. Operating margin was 16.7%, 20 basis points worse than the prior-year quarter. Net margin was 11.6%, 40 basis points worse than the prior-year quarter.
Looking ahead
Next quarter's average estimate for revenue is $2.74 billion. On the bottom line, the average EPS estimate is $0.72.
Next year's average estimate for revenue is $11.35 billion. The average EPS estimate is $2.93.
Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,084 members out of 1,144 rating the stock outperform, and 60 members rating it underperform. Among 364 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 356 give Automatic Data Processing a green thumbs-up, and eight 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 $59.83.
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