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Automatic Data Processing (ADP) Beats on Q1 Earnings

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Founded in 1949, New Jersey-based Automatic Data Processing Inc. (ADP - Free Report) is one of the world’s leading providers of human capital management solutions and integrated computing solutions to vehicle dealers. It serves approximately 637K clients across 125 nations.

The company reports in three business segments – Employer Services, Professional Employer Organization (PEO) Services and Dealer Services.

The Employer Services segment includes human resource information, payroll processing, human resources tax and compliance management, and benefit administration products and services.

On Nov 1, 2016, ADP signed an agreement to sell its CHSA and COBRA businesses to WageWorks for $235 million and anticipates an estimated pre-tax gain of approximately $200 million. The company expects the sale to be completed during the second quarter of fiscal 2017.

The Professional Employer Organization (PEO) Services segment provides small and medium-sized businesses with employment administration outsourcing solutions, including payroll, payroll tax filing, HR guidance, 401(k) plan administration, benefits administration, compliance services, health and workers' compensation coverage, and other supplemental benefits for the employees.

The Dealer Services segment provides integrated dealer management systems, digital marketing solutions and other business management solutions to the automotive, heavy truck, motorcycle, marine, recreational vehicle (RV), and heavy equipment retailers, distributors, and manufacturers.

Zacks Rank: Currently, ADP has a Zacks Rank #4 (Sell) but that could change following its first-quarter fiscal 2017 earnings report which has just released.

We have highlighted some of the key details from the just-released announcement below:

Earnings: ADP’s adjusted earnings from continuing operations came in at 86 cents a share, beating the Zacks Consensus Estimate of 77 cents. Earnings also improved 26.5% year over year.
 

Revenues: Revenues of $2.92 billion came above the Zacks Consensus Estimate of $2.91 billion and grew 7.5% on a year over year basis.

Key Stats: New business bookings were flat on a year-over-year basis in the reported quarter.

Stock Price: Shares prices did not show any movement in the pre-market trading session.

Check back later for our full write up on this ADP earnings report later!

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