The Dividend Daily

Payroll and other business services outsourcer Automatic Data Processing (ADP) on Wednesday said that its fiscal first quarter profit rose 2% from last year, helped by lower costs.

The Roseland, New Jersey-based company reported fiscal first quarter net income of $284.1 million, or 56 cents per share, compared with $276.9 million, or 54 cents per share, in the year-ago period. Revenue fell 4% from last year, to $2.1 billion.

On average, Wall Street analysts expected a lower profit of 51 cents per share.

Looking ahead, the company forecast fiscal 2010 full-year earnings of $2.34 to $2.39 per share, up from a prior outlook for $2.29 to $2.39. Analysts currently expect $2.36 per share for the year.

Automatic Data Processing shares were mostly flat in morning trading Wednesday.

The Bottom Line
We had removed shares of ADP from our “recommended” list back last Oct.6, when the stock was trading at $41.28. The company has a 3.25% dividend yield, based on last night’s closing stock price of $40.65. The stock has technical support in the $37-$39 price area. If the shares can firm up, we see overhead resistance at the $42-$44 price levels. We would remain on the sidelines.

Automatic Data Processing (ADP) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.