Paychex Fiscal 1Q Profit Falls 17 Percent

ROCHESTER, N.Y. (AP) — Paychex Inc. said Wednesday its fiscal first-quarter profit fell 17 percent as the recession hurt the payroll and personnel services provider's results.

Paychex said net income for the three months ended Aug. 31 fell to $123.6 million, or 34 cents per share, from $148.7 million, or 41 cents per share, in the year-ago period.

The latest quarter's profit matched the consensus forecast of analysts surveyed by Thomson Reuters.

Revenue fell 6 percent from $534.1 million to $500.2 million, short of analysts' forecast of $502.9 million.

"The weak economic conditions, credit crisis in the financial markets, and extremely low investment rates of return that we experienced during fiscal 2009 continue to challenge our financial results for fiscal 2010," said Jonathan Judge, president and CEO of Rochester-based Paychex.

Payroll service revenue fell 6 percent in the latest quarter to $354.4 million, with the number of checks per client falling 5 percent.

Human resources services revenue rose 1 percent to $132.1 million.

Total expenses fell 1 percent to $310.3 million.

Paychex said it expects fiscal 2010 net income to decline by 10 percent to 12 percent and revenue to decline by 2 percent to 5 percent, in line with analysts' expectations.

Paychex reported quarterly results after its shares rose 34 cents, or about 1.1 percent, to $31.04. In after-hours trading, the stock shed 82 cents, or 2.6 percent, to $30.22.