the homegrown take.
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Paychex earnings up 37%
Payroll company's record quarterly profit tops analysts' estimate; revenue rises 20%
By Christina Le Beau
Democrat and Chronicle
(March 18, 1999) -- Playing out a familiar tale, Paychex Inc. yesterday released another round of record earnings.
Net income for the third quarter ended Feb. 28 was up 37 percent, from $26.4 million in fiscal 1998 to $36.2 million in fiscal 1999. Earnings per share clocked in at 22 cents, up from 16 cents.
The average forecast of analysts surveyed by First Call Corp. was 20 cents a share.
Service revenue for the quarter was $158.4 million, up 20 percent from $131.9 million a year ago. "Service revenue" is revenue that excludes "pass-through" revenue -- money Paychex collects from client companies but pays back out in salaries and benefits to those companies' employees.
Income once again outpaced expenses from new hires and increased national marketing. The Penfield company's operating expenses for the quarter increased 15 percent, from $13.7 million a year ago to $15.7 million.
The company's two business lines continued their ascent. The payroll segment, Paychex's primary business, reported a 27 percent increase in operating income for the quarter.
Payroll service revenue, meanwhile, climbed 18 percent.
The Paychex professional service organization, which acts as a contract personnel department, posted a 540 percent increase in operating income for the quarter. PEO service revenue jumped 47 percent.
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