PENFIELD (dpa-AFX) - Payroll and human resource service provider Paychex, Inc. (PAYX) reported Wednesday a profit for the first quarter that increased five 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.
'We are pleased with our first quarter results that have provided a strong start for fiscal 2015. Payroll service revenue continues to advance, growing 4.5%, and we continue to see strong demand for our comprehensive suite of human resource outsourcing services. Solid sales execution continued with good progress during the first quarter in both new sales units and revenue,' President and CEO Martin Mucci said.
The Rochester, New York-based company reported net income of $171.3 million or $0.47 per share for the first quarter, higher than $162.8 million or $0.44 per share in the prior-year quarter.
On average, 21 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 9 percent to $666.8 million, from $613.1 million in the same quarter last year, and topped seventeen Wall Street analysts' consensus estimate of $662.62 million.
Total service revenue for the quarter grew 9 percent to $656.6 million, with payroll service revenue improving 4 percent and Human resource services revenue increasing 17 percent.
Operating income increased 5 percent to $267.5 million, and total expenses were $399.3 million, up 12 percent from the year-ago quarter.
'Our acquisition of a leading cloud-based time and attendance solutions provider added yet another powerful offering to our software-as-a-service portfolio, and initial results are promising. Our existing products and mobility solutions continue to garner favorable customer and media recognition,' Mucci added.
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.
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 businesses nationwide and has more than 100 locations across the U.S.
In Wednesday's regular trading session, PAYX is currently trading at $42.92, up $0.51 or 1.21% on a volume of 0.46 million shares. In the past 52-week period, the stock has been trading in a range of $39.21 to $45.95.
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