S&P 500 (NYSE:SPY) component Paychex Inc. (NASDAQ:PAYX) reported its results for the second quarter. Paychex is a provider of comprehensive payroll, human resource, and benefits outsourcing solutions for small and medium sized businesses.
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Paychex Inc. Earnings Cheat Sheet
Results: Net income for Paychex Inc. rose to $147.9 million (41 cents per share) vs. $140.4 million (39 cents per share) in the same quarter a year earlier. This marks a rise of 5.3% from the year-earlier quarter.
Revenue: Rose 4.6% to $559.4 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Paychex Inc. fell in line with the mean analyst estimate of 41 cents per share. Analysts were expecting revenue of $557.7 million.
Quoting Management: Martin Mucci, President and Chief Executive Officer, commented, “We made solid progress in the second quarter. While payroll services revenue grew modestly at 1.4%, impacted by client disruptions from Hurricane Sandy, Human Resource Services revenue grew at a double-digit rate as we continue to experience success in selling value-added solutions to our clients. Checks per payroll increased 1.2% for the quarter over the previous year. We are seeing good results from our selling efforts in the small-business market and are well-positioned for our peak selling season. In addition, our client retention levels remain near historic high rates generated by our employees’ commitment to client satisfaction. During the quarter, we introduced our industry-leading online client report center and acquired ExpenseWire, an online expense management solution for our mid-market clients.”
The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 2.8% and in the fourth quarter of the last fiscal year, the figure rose 3.7%.
Revenue has risen for the last four quarters. Revenue increased 2.9% to $568.1 million in the first quarter. The figure rose 5.9% in the fourth quarter of the last fiscal year from the year earlier and climbed 7.5% in the third quarter of the last fiscal year from the year-ago quarter.
The company met estimates last quarter after topping forecasts in the previous quarter with net income of 42 cents versus a mean estimate of net income of 41 cents per share.
Looking Forward: The average estimate for the third quarter is steady at 40 cents a share. For the fiscal year, the average estimate has been unchanged at $1.61 a share.
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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)