Paychex Inc. Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Paychex, Inc. (NASDAQ:PAYX) will unveil its latest earnings on Tuesday, December 20, 2011. Paychex is a provider of comprehensive payroll, human resource, and benefits outsourcing solutions for small and medium sized businesses.

Paychex, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 38 cents per share, a rise of 2.7% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. For the year, analysts are projecting profit of $1.51 per share, a rise of 6.3% from last year.

Past Earnings Performance: Last quarter, the company topped estimates by 0 cents, coming in at net income of 41 cents per share against a mean estimate of profit of 38 cents. The company fell in line with estimates in the fourth quarter of the last fiscal year.

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Wall St. Revenue Expectations: On average, analysts predict $551.7 million in revenue this quarter, a rise of 7.7% from the year ago quarter. Analysts are forecasting total revenue of $2.24 billion for the year, a rise of 7.7% from last year’s revenue of $2.08 billion.

Analyst Ratings: Analysts seem relatively indifferent about Paychex with 14 of 20 analysts surveyed maintaining a hold rating.

A Look Back: In the first quarter, profit rose 12.9% to $148.9 million (41 cents a share) from $131.9 million (36 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 9% to $552 million from $506.2 million.

Key Stats:

The company has seen net income rise in three straight quarters. Net income rose 2.9% in the fourth quarter of the last fiscal year and 16.6% in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue rose 5.8% in the fourth quarter of the last fiscal year from the year earlier, climbed 5.2% in the third quarter of the last fiscal year from the year-ago quarter and 3.5% in the second quarter of the last fiscal year.

Competitors to Watch: Automatic Data Processing (NASDAQ:ADP), CBIZ, Inc. (NYSE:CBZ), Equifax Inc. (NYSE:EFX), American Express (NYSE:AXP), McMillan Shakespeare Ltd. (NYSE:MMS), Blue Tax Group SA (NYSE:BTG), and Colliers SA Holdings Ltd. (NYSE:COL).

Stock Price Performance: During September 20, 2011 to December 14, 2011, the stock price had risen $2.39 (8.9%) from $26.87 to $29.26. The stock price saw one of its best stretches over the last year between November 23, 2011 and December 5, 2011 when shares rose for eight-straight days, rising 9.1% (+$2.47) over that span. It saw one of its worst periods between July 22, 2011 and August 2, 2011 when shares fell for eight-straight days, falling 9.5% (-$2.79) over that span. Shares are down 43 cents (-1.4%) year to date.

(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

 

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