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Paychex profit falls short of expectations, but revenue beats

Shares of Paychex Inc. were indicated slightly higher in premarket trade Wednesday, after the human resources services company reported fiscal fourth-quarter earnings that missed expectations but revenue that beat. Net income for the quarter to May 31 rose to $228.5 million, or 63 cents a share, from $195.3 million, or 54 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came to 61 cents, below the FactSet consensus of 62 cents. Revenue rose 9% to $871.1 million, above the FactSet consensus of $868.0 million. Payroll service revenue grew 3% to $452.4 million, just shy of the FactSet consensus of $453.0 million, while human resources revenue jumped 17% to $401.0 million to top expectations of $397.2 million. For fiscal 2019, the company expects adjusted EPS to increase 11% from 2018, while the current FactSet consensus of $2.79 implies 9.4% growth over 2018 adjusted EPS of $2.55. The stock has rallied 15% over the past three months through Tuesday, while the S&P 500 has gained 4.2%.

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