Paychex Earnings: Here’s Why Investors are Selling Shares Now

Paychex Inc. (NASDAQ:PAYX) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 0.54%.

Paychex Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 4.76% to $0.44 in the quarter versus EPS of $0.42 in the year-earlier quarter.

Revenue: Rose 5.14% to $607.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Paychex Inc. reported adjusted EPS income of $0.44 per share. By that measure, the company beat the mean analyst estimate of $0.43. It beat the average revenue estimate of $605.56 million.

Quoting Management: Martin Mucci, President and Chief Executive Officer, commented, “We had a solid start to fiscal 2014. Payroll revenue results met expectations and Human Resource Services revenue growth continued to progress at a double-digit rate. Our sales execution continues to advance, particularly in core payroll and in Human Resource Services. Our investments in market-leading software-as-a-service technology and mobile applications position us for long-term growth. Furthermore, client satisfaction and client retention continued at record levels.”

Key Stats (on next page)…

Revenue increased 3.86% from $585.3 million in the previous quarter. EPS increased 15.79% from $0.38 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.43 to a profit $0.42. For the current year, the average estimate has moved down from a profit of $1.7 to a profit of $1.69 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)