Paychex Q4 Profit Meets View, Revenues Top

(RTTNews) - Payroll and human resource service provider Paychex, Inc. (PAYX) reported Wednesday a profit for the fourth quarter that increased ten percent from last year, helped by growth in both payroll and human resource services revenues.

Earnings per share matched analysts' expectations, while quarterly revenues topped their estimates by a whisker. The company also initiated guidance for full-year 2016.

The Rochester, New York-based company reported net income of $161.2 million or $0.44 per share for the fourth quarter, higher than $145.9 million or $0.40 per share in the prior-year quarter.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.44 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter increased 8 percent to $692.2 million from $639.00 million in the same quarter last year, and topped eighteen Wall Street analysts' consensus estimate of $690.35 million by a whisker.

Total service revenue for the quarter grew 8 percent to $681.4 million, with payroll service revenue improving 4 percent and human resource services revenue increasing 16 percent.

The company said it served about 590,000 payroll clients as at the end of the fourth quarter, up about 2 percent from last year.

Operating income increased 10 percent to $251.6 million, and total expenses were $440.6 million, up 7 percent from the year-ago quarter.

"We are pleased with our strong finish to fiscal 2015. Payroll service revenue experienced steady growth for the fiscal year, driven by increases in revenue per check and client base. We achieved a milestone of $1 billion of Human Resource Services revenue for fiscal 2015, as strong demand for our comprehensive human resource outsourcing solutions drove double-digit growth," President and CEO Martin Mucci said.

Looking ahead to fiscal 2016, the company expects net income to grow 8 to 9 percent and total service revenue to improve 7 to 8 percent from the fiscal 2015 level. Street is currently looking for full-year 2016 earnings of $2.01 per share on revenues of $2.93 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 Tuesday's regular trading session at $46.88, down $0.22 on a volume of 2.99 million shares. In the past 52-week period, the stock has been trading in a range of $40.10 to $51.72.