With client retention improving, Automatic Data Processing has raised its revenue outlook for fiscal 2011 as it reported first quarter results that included a drop in earnings but a 6-percent rise in net revenue. Originally, the payroll services client had forecast revenue growth of 1 percent to 3 percent for the year ending June 30. But it has raised the expectation of growth of 3 percent to 5 percent for revenue.
CEO Gary Butler noted there was an unanticipated rise in client revenue retention during the quarter ended September 30, an "increase of 1.7 percentage points [that] clearly exceeds our expectations". He said that is the largest increase in that metric the company had seen in about five years. The results included a 2-percent year-over-year increase in payroll and payroll tax filings.
Revenue for the most recently ended period was $2.23 billion, up 6 percent from $2.1 billion in last year's corresponding period. However, net income dropped to $278.5 million, down just under 2 percent from $284.1 million a year earlier because of a 10 percent increase in expenses.
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards. Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that. A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind