Payroll processor ADP tops profit estimates as strong job market aids demand
Oct 25 (Reuters) - Payroll processor Automatic Data Processing beat first-quarter profit estimates on Wednesday, on higher demand for its employee management services in a strong job market.
The U.S. job market has stayed strong this year even in the face of an uncertain economic outlook. The number of Americans filing new claims for unemployment benefits fell to a nine-month low, data for the week ended Oct. 14 showed.
"First-quarter revenue growth and margin performance exceeded our expectations, as we benefited from solid new business bookings growth, strong client revenue retention and higher client funds interest revenue," said ADP's finance chief Don McGuire.
The company saw a 9% increase in revenue from its mainstay employer services business, which provides human resource outsourcing. Interest on funds held for clients also rose 43% to $202 million.
Its adjusted earnings of $2.08 per share for the quarter ended Sept. 30 exceeded average analysts' expectations of $2.03 per share, according to LSEG data.
ADP's first-quarter revenue of $4.51 billion met analysts' estimate. (Reporting by Harshita Mary Varghese; Editing by Shilpi Majumdar)
