Paychex Posts Inline Q3, Offers FY16 Outlook

Shares of Paychex, Inc. PAYX were trading lower by nearly 4 percent Wednesday morning after the company reported its third-quarter results.

Paychex said that it earned $0.50 per share in the third quarter on revenue of $740.7 million. Wall Street analysts were expecting the company to earn $0.50 per share on revenue of $751 million.

Net income rose 7 percent from the same quarter a year ago to $180.4 million as payroll service revenue rose 4 percent to $439.6 million and human resource services revenue rose 12 percent to $301.1 million.

Related Link: DeVry Shares Continue Charge Lower, Down Nearly 30% Since January

Martin Mucci, president and Chief Executive Officer, commented, "During our third quarter, we continued to experience growth across the span of our human capital management solutions. We are pleased with execution during our selling season, in particular in the mid-market space. Our service delivery remains strong with consistently high levels of client retention.

"Double-digit growth in worksite employees served through our comprehensive human resource outsourcing services reflects continued strong demand for these offerings. In addition, revenue from our Affordable Care Act compliance solutions continues to increase as we assist clients with their monitoring and year-end reporting requirements."

Looking forward to the full fiscal year 2016, Paychex expects to see its net income grow 8 to 9 percent and a sales growth of 7 to 8 percent.