- Paychex reports narrower than expected decline in Q1 profit and revenue.
- The HR management company records £163.09 million of net income.
- Paychex gives upbeat guidance for the full financial year on Tuesday.
Paychex Inc (NASDAQ: PAYX) published its earnings report for the fiscal first quarter on Tuesday that highlighted a decline in profit and revenue but one that was narrower than expected. The company said that signed of recovery after months of halt due to the Coronavirus pandemic have been evident in recent weeks as it gave upbeat guidance for the full financial year.
Shares of the company were reported 0.2% up in premarket trading on Tuesday. Paychex Inc is now trading at £62.52 per share that translates to a roughly 60% growth since late-March, when the impact of COVID-19 was at its peak. Learn more about why do prices rise and fall in the stock market.
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Paychex Q1 earnings report versus analysts’ estimates
At £163.09 million, Paychex said that its net income in the first quarter came in lower than £203.63 million in the same quarter last year. Adjusted for one-time items, the U.S. company earned 48.56 pence per share in Q1 versus the year-ago figure of 54.72 pence per share. According to FactSet, experts had anticipated 42.39 pence of adjusted EPS for Paychex in the recent quarter.
In terms of revenue, the Rochester-based company reported £718.50 million in Q1 that represents a 6% year over year decline. In comparison, FactSet consensus stood at an even lower £690.13 million. Paychex said on Tuesday that it generated £707 million from services in the recent quarter versus £679.27 million expected.
For the full year, the Nasdaq-listed firm now forecasts an up to 8% decline in its adjusted EPS on an annualised basis. Analysts predict a slightly broader 8.3% annualised decline for its full-year adjusted per-share earnings. Paychex also topped Wall Street estimates for earnings and revenue in the fiscal fourth quarter, as per the report published in July.
CEO Martin Mucci’s comments on Tuesday
CEO Martin Mucci of Paychex commented on the financial report on Tuesday and said:
“The effects of the COVID-19 pandemic continue to impact our results causing unfavourable year over year comparisons, however, client retention has remained strong, and sales performance is accelerating with year over year growth in the number of clients sold.”
Paychex introduced solutions to help businesses manage employee health and safety in the last week of September. At the time of writing, the U.S. company is valued at £22.51 billion and has a price to earnings ratio of 26.67.