Paychex stock jumps toward 3-month high after profit and revenue beats, raised outlook
Shares of Paychex Inc. surged 1.9% toward a three-month high in premarket trading Wednesday, after the human resources outsourcing services company reported fiscal third-quarter profit and revenue that rose above expectations, and boosted its full-year growth outlook, as record new sales revenue was coupled with high levels of client retention. Net income for the quarter to Feb. 28 increased to $430.7 million, or $1.19 a share, from $350.5 million, or 97 cents a share. Excluding nonrecurring items, adjusted earnings per share rose to $1.15 from 96 cents, beating the FactSet consensus of $1.05. Revenue grew 14.8% to $1.28 billion, above the FactSet consensus of $1.22 billion, while total expenses rose 10.9% to $713.2 million. For fiscal 2022, the company raised it growth outlook for adj. EPS to 22.5% to 23.0% from 18% to 20% and for revenue to 12% to 13% from 10% to 11%. The current FactSet consensus for EPS of $3.63 implies 19.4% growth and for revenue of $4.50 billion implies 11.0% growth. The stock has lost 2.9% year to date, while the S&P 500 has eased 2.8%.
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