Paychex Reports Q3 Earnings; Shares up 3.5%

Paychex, Inc. PAYX reported its third quarter results Wednesday, March 26, 2014.

Shareholders are joyful today as Paychex announced an increase of seven percent in revenue. Shares of the payroll services company are up $1.48 per share or 3.53 percent to $43.43.

The company announced that its revenue for the third quarter hit $626.0 million, representing a seven percent increase from $582.4 million for the same period lat year. Payroll service revenue increased five percent to $413.9 million and human resource services increased a whopping 12 percent to $212.1 million.

Net income also jumped 11 percent to $160.1 million and diluted earnings per share increased 10 percent to $0.44 per share.

Martin Mucci, President and Chief Executive Officer, commented, “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. Product investment in our software-as-a-service solutions and mobility applications continued with new product releases that position us for long-term growth, while we maintained strong operating margins.”

Paychex has said that revenue per check growth was the result of price increases net of discounts, combined with the impact of increased product penetration. The company has also said that the revenue increase in the Human Resource Services department is primarily due to an increase in its client base.