Automatic Data Processing expects bookings for its employer services business to drop 20 percent for the year ending June 30 over fiscal 2019 bookings. The company said this week that means it projects a 50-percent drop in the fourth quarter.

 With bookings, pays per control and bookings all down, the payroll performance produced a “significantly worse quarter than any quarter in the financial crisis,” CEO Carlos Rodriguez said during the weeks’ webcast for earnings for the third quarter ended March 31.

“We saw bookings declined significantly and rapidly in mid-March when we typically would have expected to close many deals,” Rodriguez said.  Bookings for the third quarter were off 9 percent over last year’s corresponding period. “We make tactical adjustments as we navigate through this crisis,” Rodriguez said. But he continued,  “We believe our long-term strategy is unaffected.”

Those adjustments include a change in investments include selling $1.2 billion in previously purchased long and extended maturity securities in April and halting all reinvestment in long and extended portfolios. The company also adjusted its fourth-quarter outlook for payroll revenue to a 1-percent-to-2-percent increase compared to the previously forecast of 3 percent

For the third quarter, ADP reported net income of $820.9 million, up 8.9 percent from $753.7 million a. year earlier. Revenue for the most recently ended period was $4,05 billion an increase of 6.7 percent, from $3.83 billion in last year’s corresponding period.

Employer services revenue was $2.81 billion, a rise of  3 percent from $2.72 billion. Revenue for the Professional Employer Services was $1.24 billion, rising 11 percent from $1.12 billion.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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