DOW JONES NEWSWIRES
Automatic Data Processing Inc. (ADP) reported Monday that its
fiscal third-quarter earnings fell 2.7% as rising unemployment
resulted in fewer workers at its clients' businesses.
While joblessness has been steadily increasing, there has been a
lag in its effects on payroll-processing companies like ADP, which
also provide other services such as benefits processing and
human-resources outsourcing.
For the quarter ended March 31, the global payroll-processing
company reported a profit of $402.5 million, or 80 a share, down
from $413.6 million, or 79 cents a share, a year earlier. The prior
year included earnings of 2 cents a share at discontinued
operations.
Revenue decreased 2% to $2.37 billion, with the stronger dollar
reducing revenue by three percentage points.
Analysts polled by Thomson Reuters most recently were looking
for earnings of 80 cents on revenue of $2.39 billion.
Gross margin fell to 48.7% from 49.6%.
At its employer-services business, by far its largest, revenue
increased a lower-than-expected 1%. Employees on U.S. clients'
payrolls were down 4.2%.
Combined new business sold in its employer-services and
human-resources benefits outsourcing businesses fell 10%. The
results are combined as some clients use both services. Its smaller
human-resources outsourcing business was a bright spot, with
revenue up 10% amid growth in employees on clients' payrolls.
Shares of ADP, which affirmed its 2009 earnings forecast, closed
at $34.86 on Monday and didn't trade premarket.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com