ADP Second Quarter Results
ADP (NYSE: ADP) is the type of stock that everyone wishes they had in their portfolio over the past year. It has held steady despite the economy’s massive job losses. The share price continues to hold up despite the “headwinds” that management acknowledged in their earnings release earlier this month.
For the quarter, ADP reported revenue growth of 2.5% and net operating earnings growth of 3.0%. Looking forward, for the remainder of their 2009 fiscal year ADP projects 2-3% revenue growth and 10-14% growth in diluted earnings per share.
ADP continues to return money to shareholders in the form of share buybacks and dividends. During the first two quarters, ADP repurchased 11.1 million shares at a cost of $451.2 million. Despite these purchases, the company retains cash of $1.4 billion on their balance sheet. Over the past several years, ADP has also increased their dividend payout.
ADP maintains a solid balance sheet with minimal long-term debt. At the end of the quarter, they had only $51.2 million in long-term debt.
From a cash flow perspective, ADP continues to meet their obligations and fund their dividend. Through the first six months of the year, ADP reports cash flow from operating activities of $681.6 million and capital expenditures of $83.6 million. Through the first six months, dividend payments totaled $297.2 million. As noted above, the company has been fairly aggressive in share repurchases, spending $451.2 million.
Based on their recent share price, ADP yields about 3.6%. This solid company should continue to weather the economic storm.
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