By Brittney Laryea
Automatic Data Processing Inc. (ADP) issued a downbeat revenue forecast for the recently started fiscal year and announced plans to simplify its service organization.
The provider of human-resources software and services said it aims to align its service organization with its strategic platforms "to augment ADP's service capabilities and contribute to operating efficiencies over the longer-term."
For the fiscal year, ADP expects revenue to grow 7% to 9%, which is above its 6.7% growth in 2016 but below the 9% increase that analysts surveyed by Thomson Reuters were expecting.
ADP shares, up 14% over the past year, fell 3.5% to $91.65 in midday trading in New York.
For the quarter ended June 30, ADP posted income of $282 million, or 62 cents per share, down from year-ago earnings of $336.2 million, or 72 cents a share. Excluding certain items, such as severance charges and tax benefits, per-share earnings increased to 69 cents from 55 cents.
Revenue rose 7.6% to $2.9 billion.
Analysts polled by Thomson Reuters had expected 67 cents in per-share earnings on revenue of $2.94 billion.
In the quarter, employer services revenues increased 6% to $2.29 billion. The number of payroll employees for ADP's clients rose 2.5% in the U.S. as client revenue retention fell 0.8% in the fourth quarter.
ADP said it expects its employer services segment to grow 4% to 5% in 2017.
Revenues in the professional employer organization services segment rose 13% in the quarter. The number of average worksite employees paid by the segment increased 13% to 432,000.
The company said it expects revenue in the professional employer segment to grow 14% to 16%.
Write to Brittney Laryea at Brittney.Laryea@wsj.com