DOW JONES NEWSWIRES
Automatic Data Processing Inc. (ADP) cut its fiscal-year revenue
outlook a second time, saying growth has slowed because of the
recession, which has resulted in fewer workers at its clients'
businesses.
The global payroll-processing company now sees revenue rising 1%
to 2%, down 1 percentage point from November's reduced
expectations. ADP also expects earnings per share to be at the low
end of its 10% to 14% growth forecast.
President and Chief Executive Gary C. Butler said Wednesday the
economy has weakened since the prior views were reiterated in early
February. ADP now projects 4% revenue growth at its
employer-services business, by far its largest unit, compared with
its earlier estimate of a 5% gain, amid reduced payrolls at
clients.
But Butler said the company is still on track to deliver more
than $1 billion in new-business sales this fiscal year, which ends
June. The total, however, is likely to fall about 13% from last
year, not 10% as previously projected.
Last month, ADP reported modest fiscal second-quarter growth
despite the recession, with clients seen holding up well.
ADP's shares were down 0.5% at $36.25 in premarket trading. The
stock has lost just 14% of its value in the last year, widely
outperforming the broader market.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com