Automatic Data Processing
said first-quarter earnings rose a stronger-than-expected 6.9% from a year ago, driven by surprisingly brisk business in the company's securities-services segment.
ADP earned $208.2 million, or 35 cents a share, in the three months ended Sept. 30, compared with earnings of $194.9 million, or 32 cents a share, last year. Revenue rose 7.6% from a year ago to $1.85 billion. Analysts had been forecasting earnings of 33 cents a share on revenue of $1.94 billion.
The company derives most of its revenue handling information management for employers and the brokerage industry. Brokerage services revenue rose 6% in ADP's first quarter, reflecting a 10% increase in back-office trades per day, offset by weaker-than-expected retail trades. Dealer services revenue rose 13% from a year ago while claims services revenue rose 8%.
The company bumped up its 2005 revenue growth estimate to 7% to 8% from the midsingle digits and said it is "increasingly confident in our earnings per share guidance of double-digit growth." The company is expected to earn $1.74 a share on revenue of $8.27 billion in the year ending June 2005.