Automatic Data Processing
The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Automatic Data Processing met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share increased.
Margins shrank across the board.
Automatic Data Processing tallied revenue of $2.75 billion. The 21 analysts polled by S&P Capital IQ hoped for net sales of $2.72 billion on the same basis. GAAP reported sales were 6.4% higher than the prior-year quarter's $2.58 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 $0.72. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.71 per share. GAAP EPS of $0.80 for Q2 were 5.3% higher than the prior-year quarter's $0.76 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 49.0%, 40 basis points worse than the prior-year quarter. Operating margin was 18.2%, 60 basis points worse than the prior-year quarter. Net margin was 14.2%, 30 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $3.12 billion. On the bottom line, the average EPS estimate is $1.00.
Next year's average estimate for revenue is $11.29 billion. The average EPS estimate is $2.91.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,089 members out of 1,149 rating the stock outperform, and 60 members rating it underperform. Among 391 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 383 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 $62.05.
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