Paychex Results Top Estimates

(RTTNews) - Paychex, Inc. (PAYX) said Wednesday after the markets closed that its third quarter profit rose 11% from last year, helped by growths in both payroll and human resource services revenues.

The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly revenue.

Martin Mucci, Paychex President and Chief Executive Officer, said, "We are pleased with our progress in the third quarter of fiscal 2014. Payroll service revenue growth continued to advance, led by core payroll results, while Human Resource Services revenue benefited from demand for our human resource outsourcing solutions. We continued to experience good new business revenue growth, particularly in core payroll and Paychex HR Solutions."

The company also said it now expects fiscal 2014 net income to grow in the range of 9% to 10%, compared to its prior expectations of 8% to 9% growth.

Paychex shares are now gaining 2.72% in after hours trading after closing the day's regular trading session at $41.92, down 55 cents or 1.30%. The shares trade in a 52-week range of $34.10 to $45.95.

Paychex processes payroll, handles employee benefits, and offers related human resources services. The company has been beefing up its operations, with expanded services in South America and the acquisition of a payroll provider in Germany.

The company also has broadened its software-as-a-service offerings and recently launched Paychex Accounting Online, a cloud accounting solution.

For the third quarter ended February 28, 2014, the Rochester, New York-based company reported net income of $160.1 million or $0.44 per share, compared to $144.5 million or $0.40 per share for the year-ago quarter.

On average, 20 analysts polled by Thomson Reuters expected the company to earn $0.42 per share for the third quarter.

Total revenue for the third quarter rose 7% to $636.5 million from $593.3 million in the same quarter last year. Eighteen analysts had a consensus revenue estimate of $628.85 million for the third quarter.

Payroll service revenue for the quarter increased 5% to $413.9 million, driven by growth in checks per payroll and revenue per check. Human resource services revenue surged 12% to $212.1 million in the third quarter., driven mainly by client base growth.