Paychex Q2 Results Top Estimates, Backs 2015 Outlook

(RTTNews) - Payroll and human resource service provider Paychex, Inc. (PAYX) reported Friday a profit for the second quarter that increased nine percent from last year, helped by growth in both payroll and human resource services revenues. Both earnings per share and quarterly revenues topped analysts' expectations. The company also reaffirmed its guidance for full-year 2015.

"Our results for the second quarter reflected growth and progress against key initiatives. We have experienced strong demand for our comprehensive suite of human resource outsourcing services, while payroll services revenue continues to advance," President and CEO Martin Mucci said in a statement.

The Rochester, New York-based company reported net income of $173.0 million or $0.47 per share for the second quarter, higher than $158.7 million or $0.43 per share in the prior-year quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $0.46 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter increased 10 percent to $676.3 million from $616.4 million in the same quarter last year, and topped nineteen Wall Street analysts' consensus estimate of $673.93 million by a whisker.

Total service revenue for the quarter grew 10 percent to $665.9 million, with payroll service revenue improving 4 percent and human resource services revenue increasing 21 percent.

Operating income increased 9 percent to $270.2 million, and total expenses were $406.1 million, up 10 percent from the year-ago quarter.

Looking ahead to fiscal 2015, the company continues to expect net income to grow 6 to 8 percent and total service revenue to improve 8 to 10 percent from the fiscal 2014 level. Street is currently looking for full-year 2015 earnings of $1.85 per share on revenues of $2.73 billion.

Founded by Thomas Golisano in 1971, Paychex provides services such as calculating payroll, filing tax payments, administering retirement plans and handling workers' compensation. The company serves about 580,000 payroll clients nationwide and has more than 100 locations across the U.S.

PAYX closed Thursday's regular trading session at $47.75, up $0.35 on a volume of 4.17 million shares.