Paychex Q4 Results Miss Estimates, Shares Fall in Afterhours (PAYX)

Paychex Inc. (NASDAQ: PAYX) reported a marginal increase in fiscal fourth-quarter earnings late on Wednesday as higher revenue was offset by increased taxes.

The Rochester, NY based Company manages employee benefits and some other human resources related services. The Company’s performance is strongly correlated to the state of the health of the labor market.

For the fiscal fourth quarter, Paychex reported net income of $123.5 million or 34 cents a share compared to $123.3 million or 34 cents a share, in the year-earlier quarter. Analysts’ consensus estimate was for earnings of 38 cents a share.

Earnings were weighed down by higher income tax linked to a settlement. Income tax increased to $89.7 million from $74 million, in the same quarter of last year.

Revenue rose 6% to $585.3 million from $551.5 million, in the same period of last year. Analysts polled by Thomson Reuters had forecasted revenue of $585.96 million.

Revenue from human resources segment rose 13%, aided by growth in number new clients and higer fees while revenue from payroll service increased 4%, driven by growth in payroll checks and revenue per check.

For the new fiscal year, the Company expects earnings to grow by 8% to 9% or 4615 million to $620 million on revenue growth of 5% to 6%. Analysts expected income of $621 million.

The stock edged lower about 2.6%  in afterhours, having gained 0.93% to $37.98 in regular trading hours on Wednesday. Through the close, the stock is up 22% from the start of this year.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.