* Q1 EPS $0.61 vs $0.56 last yr
* Q1 rev rises 13 pct
* Sees FY 2012 EPS rising 8-10 pct, rev rising 7-9 pct
* Says U.S. clients' payrolls rose 2.7 pct in Q1
* Shares fall as much as 5 pct
By Brenton Cordeiro
Oct 26 Automatic Data Processing
reported a higher quarterly profit helped by its core employer
services segment, but its shares fell as the company's revenue
forecast for the year indicated a possible slowdown in growth.
ADP, the world's largest payroll processor, forecast fiscal
2012 earnings to grow 8-10 percent. However, the company, which
reported a 13 percent jump in revenue in the first quarter,
expects a 7-9 percent revenue growth for the full year.
"Good first quarter, but deceleration ahead," Jefferies'
analyst Jason Kupferberg said in a note.
Pays-per-control growth, a key indicator for the company as
it reflects the average growth in the number of employees at
each ADP client, is expected to grow about 2 percent for the
That number is a slight decrease from the 2.7 percent growth
the company reported for the first quarter.
"It's the best indicator that our clients are hiring again,"
Chief Financial Officer Christopher Reidy told Reuters. "Every
industry was up in the first quarter, with the exception of
Roseland, New Jersey-based ADP caters to over half a million
clients, and issues pay checks to 1 out of every 6 Americans.
The national jobless rate currently stands at 9.1 percent.
"Even if unemployment stays where it is or gets slightly
better, it's still wind in our back, and it's not a huge driver
of our business because a 1 percent change in pays-per-control
is worth only $20 million in revenue," Reidy said.
For the first quarter, ADP earned $302.7 million, or 61
cents a share, compared with $278.5 million, or 56 cents a
share, a year ago.
Revenue grew 13 percent to $2.52 billion in the quarter,
getting a boost from recent acquisitions. Its Employer Services
segment revenue climbed 9 percent to $1.75 billion.
"A big part of the 7-9 percent we're forecasting for the
year is organic," Reidy said.
Analysts on average had expected the company to earn 61
cents a share, on revenue of $2.44 billion in the first quarter,
according to Thomson Reuters I/B/E/S.
ADP, which competes with smaller rival Paychex Inc ,
said worldwide client retention improved 0.2 percentage points
in the quarter.
ADP shares, which have risen about 20 percent since the
beginning of this year, were down 3 percent at $50.44 in midday
trading on Nasdaq.