Roseland, NJ – Automatic Data Processing’s (ADP) stated that their fourth quarter fiscal results and 2015 guidance were somewhat mixed because of challenges caused by interest rates. The company’s booking trends remain solid and their retention rates are continuing to improve. The company also appears to be experiencing some market gains and a rise of small client share and is gaining a foothold on its new platforms which are SaaS-based.
The adoption of said platforms is also starting to impact the profit margins in the company’s employer services segment. Earnings Per Share (EPS) for the fourth quarter fiscal unfortunately missed their estimate by almost $0.01 while the consensus was by $0.02. The management’s guidance for 2014 fiscal EPS from $3.12 up to $3.18 was a bit higher than their estimate of almost $3.03, though it was lower than estimated consensus of nearly $3.18. Management also warned that they are expecting that the pace of said earning growth to be half weighted for the coming fiscal year.
The 2015 EPS is being increased by analysts with a $0.11 up to $3.14 estimates and 2015 EPS fiscal estimates are being increased by $0.13 up to $3.41. The estimates also led to assume that EPS growth is 6% in the 2014 fiscal’s first half and EPS growth for the next half will accelerate to 11%. This excludes $0.12 effect from previous interest rates during the 2013 fiscal and incremental rates of $0.07 to $0.08 impact to 2014’s fiscal.