Paychex Profit Climbs but Misses Consensus Estimates

Paychex, a payroll processing company that focuses on small and mid-size companies, said after U.S. markets closed Wednesday that quarterly earnings rose 11%, helped by growth in human resources outsourcing.

The Rochester, N.Y.-based company said profit in its fiscal third quarter ended Feb. 28 rose to $126.6 million, or 33 cents a share, from $114.5 million, or 30 cents a share, a year earlier.

Paychex shares, which gave up 1.26% during the regular session, declined more in after-market trading Wednesday.

Analysts had on average expected the company to earn 35 cents a share before extraordinary items, according to Reuters Estimates. Paychex said the earnings were hit by a one-off litigation reserve of $13 million, or 2 cents a share.

Paychex said its revenue rose 13% in the period to $485.3 million.