Paychex Earnings: Here’s Why Shares are Down Now

Paychex Inc. (NASDAQ:PAYX) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.82%.

Paychex Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 0% to $0.34 in the quarter versus EPS of $0.34 in the year-earlier quarter.

Revenue: Rose 6.13% to $585.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Paychex Inc. reported adjusted EPS income of $0.34 per share. By that measure, the company missed the mean analyst estimate of $0.38. It missed the average revenue estimate of $585.96 million.

Quoting Management: Martin Mucci, President and Chief Executive Officer, commented, “Paychex closed the fiscal year with a strong fourth quarter. As anticipated, we saw improvement in payroll services revenue growth, which was 4% for the fourth quarter, up from 1% growth experienced for the first nine months of the fiscal year. Checks per payroll increased approximately 1% for the fourth quarter, as our rate of growth moderated from the higher levels experienced earlier in the year. Our Human Resource Services revenue continued to grow at a double-digit rate. Sales execution in the fourth quarter was strong, particularly in the small market and Human Resource Services. We finished the year with client retention at record levels.”

Key Stats (on next page)…

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