Paychex Profit Tops Estimates

(RTTNews) - Payroll processor Paychex Inc. (PAYX), Wednesday reported a seven percent increase in second-quarter profit, helped mostly by growth at its human resource services and Payroll services segments. Both earnings and revenue for the quarter topped Wall Street estimates.

"Sales execution remained strong, particularly in core payroll and in Human Resource Services. We continue to deliver client satisfaction and client retention at record levels," said CEO Martin Mucci.

During the second quarter, Paychex Human Resource services revenue grew 12 percent from last year, led by client base growth in its retirement services, Paychex HR Solutions, and eServices products, and by price.

Payroll service revenue was up 5 percent, on growth in checks per payroll and revenue per check.

The Rochester, New York-based company posted second-quarter revenues of $610.5 million, up 7 percent from $569.4 million last year. On average, 20 analysts polled by Thomson Reuters estimated revenue of $598.89 million for the quarter.

Net earnings for the quarter were $158.7 million or $0.43 per share, compared with $148 million or $0.41 per share last year. Analysts' estimates typically exclude special items. Analysts expected earnings of $0.42 per share for the quarter..

For fiscal year 2014, the company continues to expect net income growth of 8 percent to 9 percent.

Paychex processes payroll, handles employee benefits, and offers related human resources services. The company has been beefing up its operations, with expanded services in South America and the acquisition of a payroll provider in Germany.

The company also has broadened its software-as-a-service offerings and recently launched Paychex Accounting Online, a cloud accounting solution.

Paychex stock closed Wednesday at $43.30, up $0.40 or 0.93%, on a volume of 4 million shares on the Nasdaq. In after hours, the stock gained $0.52 or 1.20%, trading at $43.82. In the last year, the share trended in a range of $30.55 - $44.63.