Paychex Inc. (NASDAQ: PAYX) released its fiscal third-quarter financial results before the markets opened on Monday. The company said that it had $0.63 in earnings per share (EPS) on $866.5 million in revenue, which compares with consensus estimates from Thomson Reuters of $0.63 in EPS on revenue of $854.5 million. In the same period of last year, Paychex said it had EPS of $0.55 and $795.8 million in revenue.
During the most recent quarter, payroll service revenue was $455.0 million, a 2% increase compared to the same period of last year. The increase was driven primarily by growth in revenue per check, which improved as a result of price increases, net of discounts.
Human Resource Services revenue increased 17% to $393.4 million for the third quarter. This revenue growth was primarily driven by increases in client bases across the following human capital management services: comprehensive human resource outsourcing services, including HROI; retirement services; time and attendance; and insurance services.
In terms of the outlook for the fiscal 2018 year, EPS is expected to grow in the range of 15% to 16% year over year while total revenues are expected to grow roughly 7%. The consensus estimates are $2.48 in EPS on $3.36 billion in revenue for the full year.
On the books, Paychex’s cash and cash equivalents totaled $323.9 million at the end of the quarter, up from $184.6 million at the end of the previous fiscal year.
Martin Mucci, president and chief executive, commented:
We continued to experience solid growth in the third quarter across all major human capital management (HCM) product lines. In particular, comprehensive human resource (HR) outsourcing solutions, retirement services, insurance services, and our time and attendance solutions have performed well. Our service delivery also remained strong as we continue to experience favorable client retention results. We benefited from the Tax Act enacted in December 2017, the most comprehensive tax reform legislation approved in more than two decades. The benefits of tax reform and the products and solutions we provide to our clients continue to strengthen and enhance our market-leading position.
After being up handily in the premarket, shares of Paychex were last seen down more than 1% at $60.87 on Monday. The consensus analyst price target is $67.68 and a 52-week range is $54.20 to $73.10.
Credit Card Companies Are Doing Something Nuts
Credit card companies are at war. The biggest issuers are handing out free rewards and benefits to win the best customers.
It’s possible to find cards paying unlimited 1.5%, 2%, and even more today. That’s free money for qualified borrowers, and the type of thing that would be crazy to pass up. Those rewards can add up to thousands of dollars every year in free money, and include other benefits as well.
We’ve assembled some of the best credit cards for users today. Don’t miss these offers because they won’t be this good forever.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.