Shares of Paychex Inc. rose Wednesday after the provider of human-resources outsourcing services reported fiscal first-quarter profit that rose above expectations and nudged up its full-year outlook.
“Small and mid-sized businesses remain resilient in navigating the broader macro-economic environment, as our Small Business Employment Watch continues to report that small businesses are hiring workers at a moderate level and wage inflation continues to normalize along with overall inflation,” Chief Executive John Gibson said.
The stock
PAYX,
rose 0.9% in premarket trading, after closing Tuesday at a 12-week low.
Net income for the quarter to Aug. 31 rose to $419.2 million, or $1.16 a share, from $379.2 million, or $1.05 a share, in the same period a year ago.
Excluding nonrecurring items, adjusted earnings per share of $1.14 beat the FactSet consensus of $1.12.
Revenue grew 6.6% to $1.286 billion, a touch above the FactSet consensus of $1.284 billion.
For fiscal 2024, the company now expects adjusted EPS to increase in the range of 9% to 11% from the prior year, up from previous guidance for growth of 9% to 10%.
The current FactSet EPS consensus of $4.68 implies 9.6% growth.
The company, which had a market capitalization of $40.7 billion as of Tuesday’s closing stock price, also raised its full-year outlook for interest on funds held for clients to a range of $140 million to $150 million, up from $135 million to $145 million.
Paychex’s stock has slipped 2.5% year to date through Tuesday, while the S&P 500
SPX
has gained 11.3%.
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