ADP (ADP) Tops Q2 EPS by 9c, Offers FY Outlook

ADP (NASDAQ: ADP) reported Q2 EPS of $0.99, $0.09 better than the analyst estimate of $0.90. Revenue for the quarter came in at $3.2 billion versus the consensus estimate of $3.18 billion.

ADP now anticipates full-year fiscal 2018 revenue growth of 7% to 8% compared to the prior forecast of 6% to 8%. This revenue forecast continues to include approximately one percentage point of growth from acquisitions and the impact from foreign currency. This revenue forecast continues to assume growth in worldwide new business bookings of 5% to 7% compared to the $1.65 billion sold in fiscal 2017. Adjusting for additional anticipated PEO pass-through pressure, ADP now assumes adjusted EBIT margin will decline approximately 50 basis points for the full year compared to the prior forecast of down 25 to 50 basis points.

ADP expects full year diluted earnings per share to be up 8% to 9%, compared to our prior forecast of down 1% to up 1% and adjusted diluted earnings per share growth to be 12% to 13% compared to our prior forecast of 5% to 7% growth. This adjusted earnings per share forecast reflects the ongoing estimated benefits from the enactment of the Tax Cuts and Jobs Act, and ADP now forecasts an adjusted effective tax rate for fiscal 2018 of 26.9% compared to the prior forecast of 31.7%. This benefit is primarily attributable to the lower blended federal corporate statutory rate of 28.1% for fiscal 2018.

For earnings history and earnings-related data on ADP (ADP) click here.

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