Paychex Inc. (NASDAQ: PAYX) is scheduled to report first quarter 2020 earnings results on Wednesday, October 2, before the market opens. Analysts estimate the company will report earnings of $0.68 per share. This compares to EPS of $0.67 reported last year. Revenue is projected to grow around 15% year-over-year to $991.1 million.
Paychex’s growth is dependent on a strong employment rate and economic growth. Last quarter, the company benefited from growth in service revenue and interest on funds held for clients. This trend is expected to continue in the first quarter, driving the topline numbers.
Growth in the client base and in revenue per check are expected to drive revenues in the Management Solutions segment. Results in the PEO and Insurance Services division are expected to be driven by growth in clients and client worksite employees as well as a higher number of health and benefit clients.
The company is also expected to benefit from the Oasis acquisition in the first quarter. Paychex and Oasis together serve over 1.4 million work-site employees through its various HR outsourcing services. Paychex anticipates Oasis to contribute revenues of $355-375 million in 2020 and estimates it will be largely neutral to EPS.
In the fourth quarter of 2019, Paychex beat revenue expectations while earnings missed estimates. Revenues grew 16% to $980 million while adjusted EPS rose 9% to $0.63. Revenues grew across all divisions during the fourth quarter.
For fiscal 2020, total revenue is expected to grow 10-11%. GAAP net income and EPS are expected to grow approx. 8% while adjusted net income and EPS are expected to increase 8-9%. Management Solutions revenue is estimated to grow approx. 4% while PEO and Insurance Services revenue is anticipated to grow 30-35%. Interest on funds held for clients is projected to grow 4-8%.
Shares of Paychex have gained 27% thus far this year and 12% in the trailing 52 weeks. The stock has an average price target of $83.53.
Most Popular
Infographic: Highlights of Halliburton’s (HAL) Q1 2024 earnings results
Energy giant Halliburton Company (NYSE: HAL) Tuesday announced financial results for the first quarter of 2024, reporting lower earnings and a modest increase in revenues. First-quarter revenue edged up 2%
UPS Earnings: United Parcel Service Q1 2024 revenue and earnings fall
United Parcel Service, Inc. (NYSE: UPS) Tuesday reported lower revenues and adjusted profit for the first quarter of 2024. The company reaffirmed its full-year 2024 guidance. On an adjusted basis,
Key highlights from Philip Morris’ (PM) Q1 2024 earnings results
Philip Morris International Inc. (NYSE: PM) reported first quarter 2024 earnings results today. Net revenues increased 9.7% year-over-year to $8.8 billion. Organic revenue growth was 11%. Net earnings attributable to
