ROSELAND (dpa-AFX) - Automatic Data Processing Inc. (ADP), a provider of payroll services and employee-benefits administration, Wednesday said first-quarter profit declined from the prior year that recorded higher earnings from discontinued operations and lower provision for income taxes. Earnings from continuing operations topped Wall Street estimates.
Net earnings dropped to $295.2 million or $0.61 per share from $328.6 million or $0.68 per share a year earlier.
Earnings from continuing operations increased to $0.62 per share from $0.55 per share in the prior year. On average, 17 analysts polled by Thomson-Reuters estimated earnings to be $0.60. Analysts' estimates typically exclude one-time items.
As a result of the spin-off of the Dealer Services business, the results of operations and the spin-related costs are reported as discontinued operations in fiscal 2015.
Earnings from discontinued operations before income taxes fell to $65.6 million from $93.7 million, and provision for income taxes increased to $68.4 million from $30 million.
Revenues rose to $2.57 billion from $2.36 billion a year earlier. Analysts expected revenues of $2.55 billion.
According to the company, nearly all the revenue growth was organic, driven by net new recurring revenues from ADP's HCM solutions, combined with an increase in worksite employees served by ADP's Professional Employer Organization or PEO.
Worldwide new business bookings grew 11 percent, which represent solid annualized expected recurring revenues from new orders.
Employer Services revenues increased 7 percent, while PEO Services revenues climbed 18 percent from last year.
Jan Siegmund, CFO, said, 'ADP reported solid first quarter results as both of our business segments delivered solid revenue growth and improved profitability...by the end of the fiscal year, we intend to repurchase shares with the $825 million in dividend proceeds received from CDK prior to the spin-off...'
Further, the company updated its fiscal 2015 outlook to reflect the spin-off of its Dealer Services business.
For fiscal 2015, the company expects revenue growth of 7 to 8 percent and 12 to 14 percent rise in earnings per share from continuing operations.
The previous projection was for 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 stock gained just over 1 percent on Tuesday to close at $77.26.
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