Payroll processing firm Paychex (NASDAQ:PAYX) reported first-quarter profit that just managed to beat market estimates aided by higher revenues from its human resources business.
Paychex which focuses on small and medium size business entities, said it earned $153.1 million (42 cents per share) in the quarter (up from 41 cents per share last year) on revenues of $578.2 million, a 3% rise from last year. According to Reuters analysts anticipated earnings of 41 cents per share on revenues of $584 million.
Paychex, who competes in the payroll processing space with Automated Data Processing (NYSE:ADP), saw just 1% growth in its largest segment, payroll services, while its human resources segment revenue shot up 7% to just over $182 million.
In addition to the increase in profitability, Paychex indicated it’s comfortable with the 2013 fiscal year forecast of an increase of 5 to 7 percent in net income, a figure that would put earnings squarely in the middle of analyst estimates.
The company also added it expects its client base to grow along with revenue per check, although checks per payroll, an indicator of health in the small-business market that increased 2% in the quarter, is not expected to increase dramatically for the remainder of the year.
Shares of Paychex were down nearly 3% in early morning trading.
-Written by InvestorPlace Staff