The company’s president/CEO said:
Our client base continued to improve, checks per payroll continued to increase, and our client retention is near a historic high. Growth rates reflect fluctuations in the frequency of payroll processing compared to the same period last year.
The company reaffirmed fiscal year 2013 prior guidance for net income growth of 5% to 7% and service revenue growth of 5% to 6%. The consensus estimate for fiscal 2013 EPS is $1.60 on revenue of $2.35 billion. The guidance remains inline with consensus estimates.
Paychex is pretty much keeping up with competitors in its staffing and outsourcing sector. Automatic Data Processing Inc. (NASDAQ: ADP), Insperity Inc. (NYSE: NSP), and ManpowerGroup (NYSE: MAN) all reported quarterly results in line with expectations. ADP and Paychex both carry forward P/E ratios around 18, while Insperity and Manpower show lower multiples in the 13-14 range.
Paychex’s shares are up 1.4% in after-hours trading today, at $34.85, a new 52-week high if it holds through tomorrow’s opening. The current 52-week range is $25.20 to $34.70. Thomson Reuters had a consensus analyst price target of $32.50 before today’s report.
Paul Ausick
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