ROSELAND (dpa-AFX) - Payroll processor Automatic Data Processing, Inc. (ADP) on Monday raised its earnings growth guidance for the full-year 2015 to reflect the impact of the spin-off of its dealer services business and the benefit from share repurchases. However, the company maintained annual revenue growth outlook.
The company said the updated guidance reflects the impact of the impending completion of the spin-off of the operations of the former dealer services business that was announced on April 10. The results of the spun-off unit, to be named CDK Global, Inc., will be reported as discontinued operations.
It also reflects a $0.02 benefit resulting from incremental share repurchases funded by the $825 million in dividend proceeds the company expects to receive from CDK Global as a result of the spin-off.
The company anticipates completing the $825 million share repurchase by June 30, 2015, depending on market conditions.
The Roseland, New Jersey-based business outsourcing solutions provider said it now expects earnings per share from continuing operations on a comparable basis to grow 12 to 14 percent in fiscal 2015 over last fiscal year's restated $2.58 per share.
The company said in late July that it forecasts earnings per share from continuing operations to grow 11 to 13 percent, compared to the adjusted earnings of $3.14 in 2014.
On average, 24 analysts polled by Thomson Reuters expect the company to report earnings of $3.52 per share for the year. Analysts' estimates typically exclude special items.
Meanwhile, the company continues to project full-year revenue growth of 7 to 8 percent, implying revenues between $13.06 billion and $13.17 billion, based on revenues of $12.21 billion reported in 2014. Twenty-one Wall Street analysts have a consensus revenue estimate of $13.17 billion for the year.
ADP closed Tuesday's regular trading session at $82.59, up $0.35 on a volume of 1.66 million shares.
Copyright RTT News/dpa-AFX