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View All NewsADP reports PEO revenue up 13%
PEO revenue rose 13% at ADP (NASD: ADP) in the company’s 2016 fiscal fourth quarter ended June 30. Roseland, NJ-based ADP provides other services, including paycheck processing. Total revenue rose 8% to $2.9 billion in the quarter. Net earnings fell 16%; however, net earnings from continuing operations rose 10% to $282 million, or 9% on a constant dollar basis, and included a $48 million pre-tax severance charge related to a broad-based workforce optimization effort that was undertaken during the period, and increased interest expense of $14 million.
| (US$ millions) | Q4 2016 | Q4 2015 | % change |
| PEO revenue | $763.6 | $674.1 | 13% |
| Revenues other than interest on funds held for clients or PEO | $2,037.3 | $1,925.0 | 6% |
| Interest on funds held for clients | $97.3 | $95.4 | 2% |
| Total company revenue (including non PEO) | $2,898.2 | $2,694.5 | 8% |
| Net earnings | $282.0 | $336.2 | -16% |
For the full fiscal year, total revenue rose 7%, or 8% in constant currency, to $11.67 billion. Results reflect the impact of investments made to support clients through the first year of reporting requirements related to the Affordable Care Act.
Fiscal-year results
| (US$ millions) | FY 2016 | FY 2015 | % change |
| PEO revenue | $3,056.5 | $2,632.5 | 16% |
| Revenues other than interest on funds held for clients or PEO | $8,234.0 | $7,928.3 | 4% |
| Interest on funds held for clients | $377.3 | $377.7 | 0% |
| Total company revenue (including non PEO) | $11,667.8 | $10,938.5 | 7% |
| Net earnings | $1,492.5 | $1,452.5 | 3% |
Quote
“We were very pleased with our strong new business bookings and the contribution from products that assist businesses in complying with the Affordable Care Act,” said President and CEO Carlos Rodriguez. “We believe our investments in the business to drive innovation, our efforts to simplify the product portfolio, and our future plans to invest in better alignment of our service model are essential for our long-term success.”
Guidance
ADP forecasts PEO services revenue to rise approximately 14% to 16% in its 2017 fiscal year.
Share price and market cap
Shares in ADP fell 3.10% in early afternoon trading today to $92.00. The company had a market cap of $41.9 billion, according to Yahoo!