By Kristin Jones
Paychex Inc.'s (PAYX) fiscal second-quarter earnings rose 5.3% as the company continued to see growth in revenue from its human-resources segment.
The company, which also provides benefits-outsourcing services to small and midsize businesses, has posted stronger earnings for more than two years as its main check-processing business generates more revenue per paycheck. The smaller human-resources segment has also posted revenue gains in recent quarters as the segment develops new business lines.
For the quarter ended Nov. 30, Paychex posted a profit of $147.9 million, or 41 cents a share, up from $140.4 million, or 39 cents a share, a year earlier. Revenue rose 4.3% to $569.4 million.
Analysts polled by Thomson Reuters were expecting a per-share profit of 41 cents on revenue of $573 million.
Operating margin widened to 40.4% from 39.9%.
Payroll-service sales, which provide the bulk of Paychex's revenue, increased around 1.4%, hurt by disruptions from superstorm Sandy. Human-resources revenue improved 12%.
Operating income excluding interest on funds held for clients was up 5.5%.
Shares were up five cents to $33.10 after hours. Through the close, the stock was up 9.8% since the start of the year.
Write to Kristin Jones at firstname.lastname@example.org
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