Ceridian expects full year 2000 revenues for its Human Resources business segment to be in the range of $865 million to $870 million.
We continue to be encouraged by the progress being made in this transition year, said Ronald L. Turner, chairman, president and chief executive officer of Ceridian. We are confident that the initiatives we have undertaken to rebuild our U.S. payroll business are starting to pay off, and we have been able to effectively manage our expenses. Customer satisfaction showed a tremendous improvement this quarter, and customer retention for the quarter again exceeded our expectations. Market conditions remain strong, and customer and prospect response to the recently released Source 500 (Version 7.0) product is positive. Even though top line revenues are less than we had hoped, we are on track with all initiatives announced earlier this year, and we expect to meet our earnings expectations for the year.
The spin-off transaction splitting Ceridian Corporation and Arbitron into two independent, publicly-traded companies is progressing according to plan and is expected to be completed by the end of the year, added Turner. After the transaction, Ceridian will be comprised of its Human Resources businesses and the Comdata business. As a result, effective for the third quarter 2000 reporting, Ceridian is presenting Arbitron as a discontinued operation in our financial reports.
Third quarter 2000 net earnings amounted to $33.9 million, or $ .23 per diluted share of common stock, compared to third quarter 1999 net earnings of $34.9 million, or $ .24 per diluted common share. Cash earnings per share (which excludes acquisition amortization) for the current quarter were $ .31 compared to $ .30 for the same quarter in 1999.
Net earnings for the first nine months of 2000 (excluding the first quarter special charges) were $101.6 million, or $ .69 per diluted share, compared to $112.4 million, or $ .76 per diluted share for the comparable 1999 period. Cash earnings per share (which excludes acquisition amortization and the first quarter special charges) for the 2000 year-to-date period were $ .93 compared to $ .91 for the comparable 1999 period.
On a pro forma basis without the first quarter special charges and after effecting the spin-off financing and an increased effective tax rate as of January 1, 2000, earnings from continuing operations would be $21.9 million, or $ .15 per diluted share, for third quarter 2000, and $67.9 million, or $ .46 per diluted share, for the nine months ended September 30, 2000.
During the quarter, Ceridian also continued to expand the overall distribution of its Internet-based payroll product, Powerpay.com, with the announcement of important distribution arrangements with Chase Manhattan Bank and The Principal Financial Group.
Comdata had a strong third quarter, with margins exceeding 29 percent. Comdata sold its phone resale business effective July 1, 2000, which reduced its revenues on a comparable basis. During the third quarter, Comdata continued to expand its presence in the local fueling market. Notable new customers for Comdata’s local fleet include Frito-Lay and SYSCO Corporation.
During the quarter, Ceridian announced that Arbitron will realign its organization, effective January 1, 2001, to focus on three key business areas: U.S. media services, portable people meters and Webcast ratings. This action will further strengthen the management team by establishing three operating groups within Arbitron, each reporting to Stephen Morris, who will become Arbitron’s chief executive officer upon completion of the spin transaction.
Arbitron’s first U.S. field test of its portable people meter (PPM) is proceeding according to plan. The initial deployment of 300 meters is planned to take place beginning late in the fourth quarter of 2000 in the Wilmington, Delaware radio metro which is part of the larger Philadelphia area. Late in 2001, Arbitron plans to begin to increase the sample to cover the full Philadelphia market. Nielsen Media Research is providing financial and technical support and its television research experience for the test, and has the option to join Arbitron in the future commercial deployment of the PPM in the U.S.
