Automatic Data First Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Automatic Data (NASDAQ:ADP) will unveil its latest earnings on Tuesday, October 30, 2012. Automatic Data Processing offers human resource, payroll, tax, and benefits administration solutions to a wide range of clients.

Automatic Data Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 62 cents per share, a rise of 1.6% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 65 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 62 cents during the last month. For the year, analysts are projecting profit of $2.93 per share, a rise of 6.9% from last year.

Past Earnings Performance: The company fell in line with estimates last quarter after topping forecasts the quarter before. After coming in above the mean estimate by one cent in the third quarter of the last fiscal year, the company fell in line with expectations by reporting net income of 53 cents per share last quarter.

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A Look Back: In the fourth quarter of the last fiscal year, profit rose 6.9% to $258.4 million (53 cents a share) from $241.8 million (49 cents a share) the year earlier, meeting analyst expectations. Revenue rose 11.2% to $2.64 billion from $2.37 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.08 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

Wall St. Revenue Expectations: On average, analysts predict $2.63 billion in revenue this quarter, a rise of 4.4% from the year-ago quarter. Analysts are forecasting total revenue of $11.35 billion for the year, a rise of 6.4% from last year’s revenue of $10.67 billion.

Key Stats:

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 20.9% in the second quarter of the last fiscal year and 6.7% in the third quarter of the last fiscal year before increasing again in the fourth quarter of the last fiscal year.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 14.2% in the first quarter of the last fiscal year, 8.3% in the second quarter of the last fiscal year and 12.9% in the third quarter of the last fiscal year before increasing again in the fourth quarter of the last fiscal year of the last fiscal year.

Stock Price Performance: Between July 31, 2012 and October 24, 2012, the stock price rose $1.31 (2.3%), from $56.55 to $57.86. The stock price saw one of its best stretches over the last year between June 1, 2012 and June 8, 2012, when shares rose for six straight days, increasing 5.4% (+$2.76) over that span. It saw one of its worst periods between November 15, 2011 and November 23, 2011 when shares fell for seven straight days, dropping 8.7% (-$4.58) over that span.

Analyst Ratings: With 10 analysts rating the stock as a buy, two rating it as a sell and 12 rating it as a hold, there are indications of a bullish outlook.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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