For the quarter ended September 2024, Automatic Data Processing (ADP) reported revenue of $4.83 billion, up 7.1% over the same period last year. EPS came in at $2.33, compared to $2.08 in the year-ago quarter.
The reported revenue compares to the Zacks Consensus Estimate of $4.76 billion, representing a surprise of +1.48%. The company delivered an EPS surprise of +5.91%, with the consensus EPS estimate being $2.20.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how ADP performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
- Average paid PEO worksite employees during the period: 737 compared to the 737 average estimate based on two analysts.
- Revenues- Interest on funds held for clients: $253.30 million versus the five-analyst average estimate of $248.57 million. The reported number represents a year-over-year change of +25.6%.
- Revenues- Revenues, other than interest on funds held for clients and PEO revenues: $3.01 billion versus the four-analyst average estimate of $2.96 billion. The reported number represents a year-over-year change of +5.8%.
- Revenues- PEO revenues: $1.57 billion versus $1.55 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +7.1% change.
- Segment revenues- Employer Services: $3.26 billion versus $3.22 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +7% change.
- Segment revenues- PEO Services: $1.57 billion versus the three-analyst average estimate of $1.54 billion. The reported number represents a year-over-year change of +7.1%.
- Segment revenues- Other: -$2.80 million versus -$2.71 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -22.2% change.
Shares of ADP have returned +2.8% over the past month versus the Zacks S&P 500 composite's +1.8% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.
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