: ADP stock drops toward a 10-month low after human resources outsourcing company lifts profit growth outlook but keeps revenue growth view intact

Automatic Data Processing Inc. ADP reported Wednesday fiscal third-quarter earnings that topped expectations, and nudged up its full-year profit outlook while keeping its revenue outlook intact. The human resources outsourcing services company’s stock slumped 1.3% toward a 10-month low in premarket trading. Net income for the quarter to March 31 rose to $1.04 billion, or $2.51 a share, from $928.5 million, or $2.21 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share came to $2.52, to beat the FactSet consensus of $2.45. Revenue grew 9.2% to $4.93 billion, above the FactSet consensus $4.88 billion, as employer services revenue increased 11% and professional employer organization (PEO) services revenue rose 5%. For fiscal 2023, the company lifted its guidance range for adjusted EPS growth to 16% to 17% from 15% to 17% but reiterated its revenue growth outlook of 8% to 9%. The stock has dropped 11.4% year to date through Tuesday, while the S&P 500 SPX has gained 6.1%.

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