Paychex (PAYX) reported third quarter 2019 financial results that beat the Street’s estimates by a slight margin. The human resources solution provider’s earnings stood at $0.89 per share on revenue of $1.1 billion. Analysts had predicted the company to post earnings of $0.88 per share on revenue of $1.07 billion.
Paycheck stock, which hit a fresh 52-week high ($80.17) on Tuesday’s trading, was trading up slightly in the pre-market hours. However, the stock slipped to the negative territory on lighter outlook.
Services revenue grew 14% to $1 billion. On a GAAP basis, the company’s earnings declined 11% year-over-year to $0.90 per share for the three months ended February 28, 2019.
“We experienced solid growth in the third quarter across our major human capital management product lines. Results were paced by our human resource outsourcing services and time and attendance solutions, and our health and benefit insurance and retirement services,” said CEO Martin Mucci.
Excluding the anticipated impact related to the acquisition of Oasis, Paychex maintained its earlier guidance for fiscal 2019, Total revenue, including interest on funds held for clients, is expected to increase in the range of 6% to 7%, GAAP EPS is expected to increase about 4% and adjusted EPS is expected to increase in the range of 11% to 12%.
The acquisition of Oasis, which was completed during recently ended quarter, is expected to have an incremental impact to total revenue in the range of $155 million to $175 million for fiscal 2019. Excluding one-time acquisition related costs, Oasis is anticipated to have minimal impact on EPS. One-time acquisition and integration costs are anticipated to impact EPS by approximately $0.03 per share for fiscal 2019.
Paychex stock had gained 23% since the beginning of the year and 31% in the past 12 months.