COMPANY PRESS RELEASE: Automatic Data Processing chieved record revenues and earnings in its second quarter of fiscal 2002, Arthur F. Weinbach, chairman and chief executive officer, announced today. This represents ADP’s 162nd consecutive quarter of record highs in both revenue and earnings per share since becoming a public company in 1961.
Revenues approximated $1.7 billion in the quarter ended December 31, 2001, up 3% from last year. Excluding the impact of the prior year non-recurring Bridge Information Systems, Inc. write-off, pre-tax earnings and net earnings both increased 7%, and diluted earnings per share, on fewer shares outstanding, increased 11% to $.42 from $.38 last year.
Commenting on the quarter, Mr. Weinbach said, Revenue growth in Employer Services was 6% as pays per control (the number of employees our clients’ pay) and client retention were lower than last year as a result of the weak economy. New business sales were flat compared to last year, a good result given the economy. Brokerage revenues declined 1%. Excluding the recent acquisition of IBM’s output services print business, revenues declined 7%. Revenues were impacted by the mix of back office client transactions in the quarter which resulted in lower revenue per trade, and the continued reduction in discretionary spending in the financial services industry, particularly in research print and implementation services. Postage revenues, which are primarily offset by postage expenses, declined as a result of our ongoing efforts to move the proxy mailing and voting process towards electronic delivery and the householding, or consolidation of accounts. Dealer Services revenue growth and Claims Services revenue growth were 3% in the quarter.
Our revenues continue to be impacted by lower interest rates and an overall weak economy. Although we expect revenue growth to improve slightly in the second half, the decline in interest income will be more pronounced later in the year due to our higher average client balances and the reinvestment of maturing investments in our portfolio at lower yields. Our cost control actions have been very effective and have enabled us to improve margins in each of our businesses.
We continue to forecast mid single digit revenue growth for the full year and double-digit earnings per share growth over fiscal 2001 pro forma results of $1.59, Mr. Weinbach concluded.