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Compared to Estimates, ADP (ADP) Q3 Earnings: A Look at Key Metrics

Zacks Equity Research
·2 min read

Automatic Data Processing (ADP) reported $5.25 billion in revenue for the quarter ended March 2024, representing a year-over-year increase of 6.6%. EPS of $2.88 for the same period compares to $2.52 a year ago.

The reported revenue represents a surprise of +0.58% over the Zacks Consensus Estimate of $5.22 billion. With the consensus EPS estimate being $2.76, the EPS surprise was +4.35%.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how ADP performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

  • Average paid PEO worksite employees during the period: 732 versus 732 estimated by two analysts on average.

  • Revenues- Interest on funds held for clients: $320.80 million versus $285.58 million estimated by five analysts on average. Compared to the year-ago quarter, this number represents a +28.6% change.

  • Revenues- PEO revenues: $1.66 billion versus the four-analyst average estimate of $1.67 billion. The reported number represents a year-over-year change of +4.6%.

  • Revenues- Revenues, other than interest on funds held for clients and PEO revenues: $3.27 billion versus $3.28 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +5.9% change.

  • Segment revenues- Employer Services: $3.59 billion versus $3.57 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +7.5% change.

  • Segment revenues- PEO Services: $1.67 billion versus $1.66 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +4.6% change.

  • Segment revenues- Other: -$2.50 million versus -$2.73 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -24.2% change.

View all Key Company Metrics for ADP here>>>

Shares of ADP have returned -2.3% over the past month versus the Zacks S&P 500 composite's -4.1% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

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Zacks Investment Research