Ahead Of Paychex's Q2 Results

(RTTNews) - Strong demand for Paychex Inc.'s (PAYX) human resource services is likely to boost its second-quarter results. Q2 results are due to be released before the bell on Tuesday, December 22, 2015, with analysts polled by Thomson Reuters estimating earnings of $0.51 per share and revenues of $724.47 million. Analysts' estimate typically exclude certain special items.

The company claims that it remains strong with cash and total corporate investments of $954 million as of August 2015 and has no debt.

FY16 Outlook

The company still projects fiscal 2016 net income to grow 8% - 9% and total service revenue to improve 7% - 8% from the fiscal 2015 level. Analysts are currently looking for 2016 earnings of $2.01 per share on revenue growth of 7.2% to $2.94 billion.

In the previous quarter...

First-quarter net income was $209.1 million or $0.58 per share, higher than $171.3 million or $0.47 per share in the prior-year quarter.

Results for the latest quarter were positively impacted by a $0.06 per share net tax benefit recorded for income derived in prior tax years. Excluding the net tax benefit, net earnings per share would have been $0.52. Twenty analysts had a consensus earnings estimate of $0.51 per share.

Total revenue for the quarter increased 8 percent to $723 million from $666.8 million in the same quarter last year, and topped sixteen Wall Street analysts' consensus estimate of $717.52 million by a whisker.

"Fiscal 2016 is off to a good start, and we have continued to experience positive results across our major product lines. Payroll service revenue growth was 5%, as expected. We continue to see strong demand for our human resource services, including double-digit growth in the number of client worksite employees served," President and CEO Martin Mucci said.

Most Recently...

Earlier this month, Paychex announced the acquisition of Advance Partners, a provider of integrated financial, operational, and strategic services to support independent staffing firms. Financial terms remain undisclosed.

The transaction was structured as an acquisition of substantially all of the assets of Advance Payroll Funding Ltd., the operating company, and Advance Temporary Help Services Inc., its non-operating parent company, by a wholly owned subsidiary of Paychex.