- US Top Banks Warn Congress on 'Break-Up' Risks
- Obama Nudges Hu on Yuan; to Ease Trade Tensions
- UBS Targets $15 Billion Annual Profit in Mid-Term
- Fed's Kohn Sees No Asset Bubbles Building in US
- Buffett's Berkshire Hathaway Boosts Stake in Wal-Mart
- Microsoft Co-founder Allen Diagnosed with Cancer
- Time Warner to Spin Off AOL on December 9
- Gates Boosts Waste Management, Coca Cola Stakes
- US Cities With Most Underwater Mortgages
- Answers to Your Questions: A Path to Economic Disaster?
- 5 Ways to Play the Chinese Markets: Analyst
- Meredith Whitney: Turns Bearish
- 3 Stock Plays on Rising College Costs
- Warren Buffett's Berkshire Hathaway Almost Doubles Wal-Mart Holdings During Summer
- Nov. 16: Unusual Volume Leaders
- Getting to the Heart of the Merck-Abbott Embargo Break
- What MGM's Sale Could Say About Value of Content
- My Ratings on Lowe's & Home Depot: Analyst
- AP IMPACT: Tobacco execs quickly find tax loophole
- Budget airline easyJet FY profit down 14 percent
- Burberry Group PLC 1st-half profit down 24 percent
- Business foes of health care revamp ramp up effort
- Job prospects drawing students to ag schools
- Tajikistan bans production of standard light bulbs
- Cable and Wireless to split in 2 by March 31
- UBS sets mid-term goal: $15BN pretax profit a year
- Singapore's exports stumble in October
Text Size 
By Juan Lagorio
NEW YORK (Reuters) - Automatic Data Processing Inc <ADP.O> posted higher-than-expected quarterly earnings on Wednesday as the world's largest payroll processing company cut costs to offset lower sales.
ADP also raised its fiscal 2010 revenue forecast, and its shares climbed 1 percent to $41.06.
Net income from continuing operations climbed to $284 million, or 56 cents a share, in the fiscal first quarter, ended September 30, from $278 million, or 54 cents a share, a year earlier.
Earnings beat analysts' average forecast of 50 cents per share, according to Thomson Reuters I/B/E/S.
Costs decreased 5 percent to $1.7 billion, while revenue fell 4 percent to $2.1 billion. Half of the revenue decline was due to the impact of the strong dollar on international sales, ADP said.
"Weak employment and economy continue to hurt near-term growth prospects. However, recent cost actions delivered solid upside surprise," Barclays Capital analyst Gary Bisbee wrote in a note to clients.
In the United States, where ADP processes one in every six payroll payments, revenue from the payroll and payroll tax filing business decreased 7 percent. The number of employees on payrolls of ADP clients fell 6.5 percent on a same-store basis as American firms cut hundreds of thousands of jobs.
"Certain market indicators suggest that the U.S. economy has reached the trough of the downturn and has begun to stabilize," Chief Executive Gary Butler said in a statement. "However, the economic landscape is still challenging and the timing of the inevitable recovery remains uncertain."
The company raised its revenue forecast for fiscal 2010. It now estimates revenue will fall 1 percent to 2 percent, compared with a previous forecast for a decline of 2 percent to 4 percent.
It forecast 2010 earnings per share of $2.34 to $2.39. Three months ago it forecast $2.29 to $2.39.
"What we see from our clients is a bit of cautious optimism," Chief Financial Officer Chris Reidy told Reuters in an interview.
(Reporting by Juan Lagorio; Editing by Derek Caney and John Wallace)
Print
Email
- Where, what, how.
- CNBC's Jim Goldman asks: Has the sun begun to set on Twitter? Data suggests its best days are over.
- Everyone wanted a piece of Madoff's "Bullship"--the famous buoy sold for $7,500 at auction. You won't believe these prices.
- De Loach Vineyards is selling its pinot noir the old fashioned way, helping to cut energy and transportation costs.
- Why are the Chinese concerned about the progress of U.S. health care legislation?
- CNBC's Maria Bartiromo talks to rapper Snoop Dogg about brand identity in both business and music.
Data is a real-time snapshot *Data is delayed at least 15 minutes