ADP Reports Fourth Quarter and Fiscal 2019 Results; Provides Fiscal 2020 Outlook
Revenues increased 6% to $14.2 billion for the year, 7% organic constant currency
Employer Services New Business Bookings grew 8% for the year
Net earnings increased 22% to $2.3 billion; adjusted net earnings increased 19% to $2.4 billion
Adjusted EBIT increased 15% to $3.2 billion, and adjusted EBIT margin expanded 160 basis points to 22.3%
Diluted earnings per share ("EPS") increased 23% to $5.24 for the year; adjusted diluted EPS increased 20% to $5.45
Forecasting fiscal 2020 revenue to increase 6% to 7%, adjusted EBIT margin to increase 100 to 125 basis points, and adjusted diluted EPS to increase 12% to 14%
ROSELAND, N.J. – July 31, 2019 – ADP (Nasdaq: ADP), a leading global technology company providing human capital management (HCM) solutions, today announced its fourth quarter and fiscal 2019 financial results, and provided its fiscal 2020 outlook.
Fourth Quarter and Fiscal 2019 Consolidated Results
Compared to last year’s fourth quarter, revenues increased 6% to $3.5 billion, 6% organic constant currency. Net earnings increased 237% to $476 million, with growth primarily benefiting from the impact of prior year pre-tax charges of $365 million related to the Company's Voluntary Early Retirement Program and other transformation initiatives. Adjusted net earnings increased 13% to $498 million. Adjusted EBIT increased 7% to $669 million, representing adjusted EBIT margin expansion of 20 basis points in the quarter to 19.1%, including approximately 20 basis points of pressure from acquisitions. Adjusted EBIT margin expansion was driven by continued execution of transformation initiatives as well as operating efficiencies, offset by incremental selling and amortization expense. ADP’s effective tax rate for the quarter was 24.9%, and 25.0% on an adjusted basis. Diluted EPS increased 241% to $1.09, and adjusted diluted EPS increased 15% to $1.14 due to the factors discussed above as well as a net share count reduction.
For the year, revenues increased 6% to $14.2 billion, 7% organic constant currency. Net earnings increased 22% to $2.3 billion, and adjusted net earnings increased 19% to $2.4 billion. Adjusted EBIT increased 15% to $3.2 billion, representing adjusted EBIT margin expansion of 160 basis points to 22.3%, including approximately 30 basis points of pressure from acquisitions. Adjusted EBIT margin expansion was driven by continued execution of transformation initiatives as well as operating efficiencies. ADP’s effective tax rate for the year was 23.7%, and 23.8% on an adjusted basis. Diluted EPS increased 23% to $5.24, and adjusted diluted EPS increased 20% to $5.45 due to the factors discussed above as well as a net share count reduction.
As part of its ongoing transformation strategy, in the fourth quarter of fiscal 2019 ADP implemented a Workforce Optimization initiative to reduce management layers and increase spans of controls.
“This quarter represented a solid finish to a strong year,” said Carlos Rodriguez, President and Chief Executive Officer, ADP. “We are pleased that we have balanced our financial growth objectives with a number of operational priorities. We continued to successfully execute on our transformation initiatives, launched a new brand campaign, and made significant progress on our next generation platforms as we stay focused on creating long-term shareholder value.”
“ADP remains committed to reinvesting in its product, distribution, and service to drive sustainable growth,” said Kathleen Winters, Chief Financial Officer, ADP. “And we are moving forward with our transformation initiatives as we look to both simplify the organization and enhance our competitive positioning.”
The following information was filed by Automatic Data Processing Inc (ADP) on Wednesday, July 31, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.