Wednesday, November 21, 2012


the 4 AAA rated S&P 500 companies:
Exxon, Microsoft, Johnson & Johnson, Automatic Data Processing

November 2, 2012 10am est.

Equities Research

Friday Morning Call: STRONG SELL  (NYSE: ADP) $59.36

Automatic Data Processing, Inc.
Operational Cash Flow per share (OPS) declined 121% year over year
1st Quarter 2013 financials filed with Securities & Exchange Commission on November 2,2012 @ 9:22am est.

After 72 consecutive quarters (18 years) reporting positive operational cash flow, ADP disclosed  FY2013 1st Quarter Operational Cash flow of NEGATIVE $65 million!

Stockdiagnostics has ranked ADP with a "1" (highest ranking) for 72 consecutive quarters until this morning's downgrade to a "2" ranking.T

1st Quarter 2013 10Q (ending 9/30/2012)
                               - $0.13 OPS (Q1 2013) vs. $0.65  (Q1 2012).OPS DECLINED 121%

ADP reported negative $65 million in Operational Cash flow down from $316 million a year ago for the comparable 1st quarter.

OPS Spread:
Earnings Per share vs. Operational Cash Flow per share
1Q 2012 ADP had a positive $0.04 OPS spread. EPS $0.61 vs. OPS $0.65
1Q 2013 ADP had a negative $0.76 OPS Spread. EPS $0.63 vs. OPS -$0.13

Operational Cash Flow trailing 12 months declined 15%
TTM ending 9/30/2011 : $1.799 billion
TTM ending 9/30/2012 : $1.528 billion

OPS Multiple Trailing Twelve Month
9/30/2011 TTM 3Q 2011 $3.71 OPS X 13
9/30/2012 TTM 3Q 2012 $3.14 OPS X 19

Stockdiagnostics Chart with ADP Operational Cash Flow Statistics
Archive posts of ADP on

shares outstanding 485,473,927

**from 10Q for September 30,2012 quarter
**Net cash flows used in operating activities were $65.1 million for the three months ended September 30, 2012, as compared to $316.3 million provided by operating activities for the three months ended September 30, 2011.  The decrease in net cash flows provided by operating activities was due to the payment of a premium of $141.4 million related to our reinsurance arrangement with ACE American Insurance Company, higher pension plan contributions of $50.3 million, an unfavorable change in the net components of working capital and a variance in the timing of tax-related net cash payments of $23.6 million.

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