Paychex saw earnings rise 5% year over year to $0.43 per share, which was exactly what Wall Street was expecting. On the top line, revenue surged 7% higher to $610.5 million and left the $605 million analyst target behind.
These results were driven by modestly higher payroll service sales and a strong increase in human resources services. The revenue boost was made somewhat easier by comparisons against the effects of superstorm Sandy in 2012, with no such productivity-blocking disasters affecting this quarter.
Looking ahead, Paychex sees payroll service sales moderating in the back half of fiscal year 2014 while human resources operations should stay at the current double-digit growth rate. All told, total sales should increase 5%-6% year over year and net income for the fiscal year should jump 8%-9% higher. Both earnings and revenue projections are largely in line with analyst estimates.
At Wednesday's closing bell, Paychex shares were trading 28.5% above year-ago prices. The after-hours push is driving Paychex returns above 30% in the 52-week time frame.
Paychex has scheduled a conference call to discuss these results with analysts. Investors can access this call at the company's investor relations site, starting at 10:30 Eastern on Thursday, Dec. 19.