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click here . The February quarter is normally a stronger quarter for Paychex ( PAYX), as the company generally benefits from yearend items, such as bonus checks and new contracts, which start with the beginning of the calendar year. So it's no surprise that revenue estimates for the quarter have crept slightly higher over the past few weeks, indicating that the Street is expecting a solid report. PAYX is scheduled to report its third-quarter 2006 earnings results after the market closes March 28. The company will host a conference call to go over the results at 10:30 a.m. EST March 29. The current consensus estimates call for the company to produce EPS of 31 cents on revenue of $426 million. The company reports revenue along three distinct segments:
- 1. Payroll, which comprises about 80% of the revenue and includes functions such as processing payroll checks, tax filings, etc., is expected to post growth around 10%.
- 2. Human resource services represents about 10% to 15% of the company's overall revenue. This segment has experienced solid growth in the 20% to 30% range as small businesses outsource this function to PAYX.
- 3. The interest on funds held (investment portfolio) segment only represents about 5% to 10% of the company's overall revenue but has experienced very strong growth due to increasing rates.