Shares of Paychex Inc. stock fell some 2.5 percent at midday Tuesday after the company reported its fiscal first-quarter results and a pair of analysts downgraded its stock.
Paychex, after the market closed Monday, reported earnings per share of 42 cents, up a penny from a year ago. That met analysts’ expectations. Net income rose to $153.1 million, up 3 percent.
The company logged total revenue of $578.2 million, also up 3 percent but below Street expectations. Analysts had expected the company to record $584 million in total revenue for the three months ended Aug. 31.
Martin Mucci, Paychex president and CEO, said he was pleased with the company’s performance and the positive signs it saw in the first quarter.
“The first quarter has fiscal 2013 off to a good start with results meeting our expectations,” Mucci said in a statement. “Our client base continued to improve, checks per payroll continued to increase and our client retention is near a historic high. Growth rates reflect fluctuations in the frequency of payroll processing compared to the same period last year.”
Payroll service revenue increased 1 percent for the quarter, reaching $385.9 million, while human resource services revenue increased 7 percent to $182.2 million.
Its stock (NYSE: PAYX) was trading at 1:45 p.m. at $33.48, down from Monday’s close of $34.38.
Marketwatch Inc. reported the stock was downgraded by analysts at UBS AG and Citigroup Inc. UBS cut its rating to neutral, citing "cautious overall commentary and general top-line lightness." Citigroup reduced its rating to sell, saying "the company has had difficulty in growing its client base, which is the most sustainable source of long-term growth."
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