Paychex stock pulls back after profit tops expectations and revenue falls in line with forecasts
Shares of Paychex Inc. dropped 3.8% in premarket trading, a day after reaching an all-time intraday high, after the human resources services company reported fiscal third-quarter profit that topped expectations while revenue fell in line with forecasts. Net income for the quarter to Feb. 28 slipped to $350.5 million, or 97 cents a share, from $354.5 million, or 98 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share fell to 96 cents from 97 cents, but was above the FactSet consensus of 92 cents. Total revenue declined 3% to $1.11 billion, matching the FactSet consensus of $1.11 billion, as management solutions revenue was about flat at $846.8 million and professional employer organization (PEO) and insurance solutions revenue fell 8% to $249.8 million. For fiscal 2021, the company raised its adjusted EPS growth outlook to negative 2% to flat from negative 1% to negative 4%, and said it now expected total revenue to be down 1% to up 1%, compared with a previous outlook of down 3% to flat. The stock which reached a record intraday high of $101.15 on Monday -- the record close of $100.82 was on March 26 -- has rallied 10.1% over the past three months through Monday, while the S&P 500 has gained 8.8%.
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