Paychex (PAYX) Tops Q1 EPS by 2c, Updates Guidance

Paychex (NASDAQ: PAYX) reported Q1 EPS of $0.62, $0.02 better than the analyst estimate of $0.60. Revenue for the quarter came in at $816.8 million versus the consensus estimate of $816.3 million.

Our outlook for the fiscal year ending May 31, 2018 (“fiscal 2018”) is based upon current market, economic, and interest rate conditions continuing with no significant changes. We have updated our guidance as a result of our acquisition of HROI and to reflect the net discrete tax benefit related to employee stock-based compensation payments recognized in the first quarter. Our updated guidance is as follows:

• HRS revenue is anticipated to increase in the range of 12% to 14%;
• Total revenue is expected to grow approximately 6%;
• Operating income as a percent of total revenue is anticipated to be in the range of 39% to 40%; and
• The effective income tax rate is anticipated to be in the range of 35.0% to 35.5%.

Other aspects of our guidance for fiscal 2018 remain unchanged from what we provided previously.

For earnings history and earnings-related data on Paychex (PAYX) click here.

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