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ADP beats profit estimate, raises revenue growth forecast
November 2, 2017 / 11:21 AM / 20 days ago

ADP beats profit estimate, raises revenue growth forecast

(Reuters) - Payroll processor Automatic Data Processing Inc (ADP.O) on Thursday reported a better-than-expected quarterly profit and raised its full-year revenue growth forecast amid its ongoing proxy war with billionaire investor William Ackman.

Ackman unveiled a stake of 8.3 percent, including 2 percent in common shares, in August, and has since criticized the company for what he calls sluggish earnings and inefficient operations.

He has also nominated three members to the company’s board ahead of its annual meeting next week.

Shares of the HR and payroll services provider were up nearly 1 percent in premarket trading on Thursday.

Profit from ADP’s professional employer organization services unit, which caters to small and medium-sized businesses, rose 9.1 percent to $116.8 million in the first quarter.

The company raised its revenue growth forecast to a range of 6 percent to 8 percent for fiscal 2018, compared with a 5 percent to 6 percent growth estimated previously.

It expects to incur pre-tax charges related to the proxy war of about $27 million in fiscal year 2018.

Net earnings rose to $401.5 million, or 90 cents per share, in the quarter ended Sept. 30 from $368.7 million, or 81 cents, a year earlier.

Excluding items, the company earned 91 cents per share, beating analysts’ average estimate of 85 cents, according to Thomson Reuters I/B/E/S.

Total revenue rose to $3.08 billion, above analysts’ estimate of $3.06 billion.

Reporting by Munsif Vengattil in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D'Silva

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