Automatic Data Processing Inc. (ADP) has reported a 9.54 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $368.70 million, or $0.81 a share in the quarter, compared with $336.60 million, or $0.72 a share for the same period last year.
Revenue during the quarter grew 7.48 percent to $2,916.90 million from $2,714 million in the previous year period. Gross margin for the quarter expanded 89 basis points over the previous year period to 40.22 percent. Total expenses were 81.98 percent of quarterly revenues, down from 82.97 percent for the same period last year. This has led to an improvement of 99 basis points in operating margin to 18.02 percent.
"We are off to a solid start in fiscal 2017, and are pleased with the strategic and operational progress we achieved during the quarter," said Carlos Rodriguez, president and chief executive officer, ADP. "In particular, we believe efforts to align our service model to our HCM solution strategy and upgrade our clients to our strategic cloud platforms are having a positive impact on our business performance."
For the financial year 2017, Automatic Data Processing Inc. expects revenue to grow in the range of 7 percent to 8 percent.
Operating cash flow improves significantly
Automatic Data Processing Inc. has generated cash of $329.80 million from operating activities during the quarter, up 202.29 percent or $220.70 million, when compared with the last year period.
Cash flow from investing activities was $8,763.90 million for the quarter, up 2,645.58 percent or $8,444.70 million, when compared with the last year period.
The company has spent $9,513.60 million cash to carry out financing activities during the quarter as against cash inflow of $1,128.20 million in the last year period.
Cash and cash equivalents stood at $2,776.60 million as on Sep. 30, 2016, down 12.81 percent or $408.10 million from $3,184.70 million on Sep. 30, 2015.
Working capital declines
Automatic Data Processing Inc. has witnessed a decline in the working capital over the last year. It stood at $3,404.90 million as at Sep. 30, 2016, down 5.12 percent or $183.90 million from $3,588.80 million on Sep. 30, 2015. Current ratio was at 1.13 as on Sep. 30, 2016, down from 1.13 on Sep. 30, 2015.
Days sales outstanding went down to 24 days for the quarter compared with 53 days for the same period last year.
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