ADP (ADP) Tops Q3 EPS by 8c

ADP (NASDAQ: ADP) reported Q3 EPS of $1.52, $0.08 better than the analyst estimate of $1.44. Revenue for the quarter came in at $3.7 billion versus the consensus estimate of $3.67 billion.

Fiscal 2018 Outlook

Certain components of ADP’s fiscal 2018 outlook and related growth comparisons exclude the impact of the following items and are discussed on an adjusted basis where applicable. Please refer to the accompanying financial tables for a reconciliation of these adjusted amounts to their closest comparable GAAP measure.

• Fiscal 2017 pre-tax restructuring charges of $90 million related to transformation initiatives.
• Fiscal 2017 second quarter pre-tax gain on the sale of the CHSA and COBRA businesses of $205 million.
• Fiscal 2018 pre-tax proxy contest charges of about $33 million.
• Fiscal 2018 one-time net tax benefit of about $43 million from the Tax Cuts and Jobs Act.
• Fiscal 2018 anticipated pre-tax charges of about $46 million related to transformation initiatives. This estimate does not include anticipated fourth quarter charges related to the Company’s recently announced voluntary early retirement program.

ADP continues to expect full-year fiscal 2018 revenue growth of 7% to 8%. This revenue forecast includes approximately two percentage points of growth from acquisitions and the impact from foreign currency. ADP now anticipates growth in worldwide new business bookings of 6% to 7% compared to our prior forecast of up 5% to 7%. ADP now estimates adjusted EBIT margin to be about flat for the full year compared to the prior forecast of down 50 basis points.

ADP expects full year diluted earnings per share to be up 11% to 12% compared to our prior forecast of up 8% to 9%; and adjusted diluted earnings per share growth to be 16% to 17% compared to our prior forecast of 12% to 13% growth. ADP now anticipates an adjusted effective tax rate of 26.2% compared to the prior forecasted rate of 26.9%.

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

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