Paychex Quarterly Profit Rises

Paychex Inc. on Wednesday said its quarterly earnings rose 4% as the company continued to add more clients and revenue was boosted by an acquisition.

The payroll and human-resources outsourcing company, which focuses on small and midsize businesses, has expanded its full-service offerings, including the addition of products to help clients comply with the Affordable Care Act.

For the fiscal first quarter ended Aug. 31, Paychex reported a profit of $217.4 million, or 60 cents a share, up from $209.1 million, or 58 cents a share, a year earlier. The latest period included a tax benefit of 2.5 cents a share, while the year-earlier period included a tax benefit of 6 cents a share. Revenue increased 8.6% to $785.5 million.

Analysts polled by Thomson Reuters expected per-share profit of 57 cents and revenue of $783 million.

Paychex said revenue in its payroll business grew 4.3% to $450.9 million, as the company's client base continued to expand and revenue per check improved thanks to price increases.

Human-resources segment revenue rose 15% to $322.6 million, mostly the result of continued client base growth across the company's main services.

In December, Rochester, N.Y.-based Paychex acquired Advance Partners, a deal that expanded the company's presence in the growing staffing outsourcing industry. The acquisition contributed roughly 1% to payroll-service revenue growth and 2% to human-resources revenue growth for the latest quarter.

Paychex shares edged up 3 cents to $60.30 in light premarket trading. Through Tuesday's close, the stock was down 2.6% from its all-time high in July.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

September 28, 2016 09:55 ET (13:55 GMT)

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