Payroll and human resources service provider Paychex (PAYX) - Get Report wobbled Wednesday after the company reported third-quarter results that beat analysts' expectations but issued an outlook below consensus.
The Rochester, New York-based company reported a 14% increase in revenue to $1.1 billion, and adjusted earnings of 89 cents per share. Analysts polled by FactSet were expecting the company to report revenue of $1.04 billion and earnings of 88 cents.
However, the company expects management solutions revenue in the fiscal year to grow 4% to $801.6 million, short of consensus guidance of $803.9 million. Adjusted net income is expected to rise between 11% and 12%, while insurance services revenue is expected increase between 18% and 20%.
Net income and diluted earnings are expected to rise 4% in the fiscal year.
"We experienced solid growth in the third quarter across our major human capital management product lines. Results were paced by our human resource outsourcing services and time and attendance solutions, and our health and benefit insurance and retirement services. We also introduced some significant new product and mobility app enhancements for our clients," said CEO Martin Mucci.
The company said that it has a strong cash position of about $886.4 million as of Feb. 28, vs. short-term borrowings of $53.6 million. The company's existing credit facilities total $800 million.
The stock was down 0.5% to $79.74.
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