Paychex’s stock falls after profit tops views but revenue comes up shy amid cost and labor challenges

Paychex’s stock falls after profit tops views but revenue comes up shy amid cost and labor challenges


Shares of Paychex Inc.
PAYX,
+0.81%
shed 2% in premarket trading Thursday, after the human resources services company beat fiscal second-quarter profit expectations but came up a bit short on revenue, amid cost and labor market challenges. Net income for the quarter to Nov. 30 rose to $392.7 million, $1.08 a share, from $360.3 million, or 99 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $1.08 topped the FactSet consensus of $1.07. Revenue grew 5.7% to $1.258 billion, below the FactSet consensus of $1.268 billion. “The macro-economic environment remains stable for small and mid-sized businesses, who continue to face challenges in both the cost of and access to growth capital; and finding quality talent in the current labor market,” said Chief Executive John Gibson. For fiscal 2024, the company revised up its guidance range for adjusted EPS growth to 10% to 11% from 9% to 11%. The stock has tacked on 10.6% year to date through Wednesday, while the S&P 500
SPX,
+0.17%
has rallied 22.4%.



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