Automatic Data Processing Inc. (ADP) has reported a 49.65 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $510.90 million, or $1.13 a share in the quarter, compared with $341.40 million, or $0.74 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $390.30 million, or $0.87 a share compared with $332.80 million or $0.72 a share, a year ago.
Revenue during the quarter grew 6.42 percent to $2,987.30 million from $2,807 million in the previous year period. Gross margin for the quarter expanded 76 basis points over the previous year period to 40.82 percent. Total expenses were 80.63 percent of quarterly revenues, down from 82.28 percent for the same period last year. This has led to an improvement of 166 basis points in operating margin to 19.37 percent.
Operating income for the quarter was $578.70 million, compared with $497.30 million in the previous year period.
"Overall, I am pleased with ADP's second quarter results which demonstrate the strength and stability of our business model. We believe the client experience is a key component of our success and that our investments and strategic initiatives are continuing to have a positive impact on our business performance," said Carlos Rodriguez, president and chief executive officer, ADP.
Operating cash flow improves significantly
Automatic Data Processing Inc. has generated cash of $841.10 million from operating activities during the first half, up 63.19 percent or $325.70 million, when compared with the last year period.
Cash flow from investing activities was $2,719.20 million for the first half as against cash outgo of $5,865.70 million in the last year period.
The company has spent $4,029.30 million cash to carry out financing activities during the first six months as against cash inflow of $6,526.80 million in the last year period.
Cash and cash equivalents stood at $2,705.20 million as on Dec. 31, 2016, down 3.21 percent or $89.70 million from $2,794.90 million on Dec. 31, 2015.
Working capital declines
Automatic Data Processing Inc. has witnessed a decline in the working capital over the last year. It stood at $2,851.80 million as at Dec. 31, 2016, down 10.63 percent or $339.30 million from $3,191.10 million on Dec. 31, 2015. Current ratio was at 1.09 as on Dec. 31, 2016, down from 1.10 on Dec. 31, 2015.
Days sales outstanding went down to 24 days for the quarter compared with 52 days for the same period last year.
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