Paychex (PAYX) has reported 6.82 percent rise in profit for the quarter ended Nov. 30, 2016. The company has earned $202.10 million, or $0.56 a share in the quarter, compared with $189.20 million, or $0.52 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $201.20 million, or $0.56 a share compared with $189 million or $0.52 a share, a year ago.
Revenue during the quarter grew 6.78 percent to $771.40 million from $722.40 million in the previous year period. Total expenses were 59.67 percent of quarterly revenues, up from 59.27 percent for the same period last year. That has resulted in a contraction of 40 basis points in operating margin to 40.33 percent.
Operating income for the quarter was $311.10 million, compared with $294.20 million in the previous year period.
Martin Mucci, president and chief executive officer, commented, "During the second quarter, we continued to achieve growth across all of our major human capital management "HCM" product lines and reached a new milestone of one million client worksite employees served by our Paychex HR Services. This month also marks the one-year anniversary of our acquisition of Advance Partners. We are pleased with the contributions of this acquisition to our financial results and remain encouraged by the opportunities for growth in this business."
For fiscal year 2017, Paychex expects service revenue to grow in the range of 7 percent to 8 percent. It projects net income to grow at 7 percent. The company expects adjusted net income to grow at 8 percent.
Operating cash flow falls marginallyPaychex has generated cash of $413.40 million from operating activities during the first half, down 1.55 percent or $6.50 million, when compared with the last year period. Cash flow from investing activities was $697.90 million for the first half, down 6.79 percent or $50.80 million, when compared with the last year period.
The company has spent $1,077.80 million cash to carry out financing activities during the first six months as against cash outgo of $926.30 million in the last year period.
Cash and cash equivalents stood at $165 million as on Nov. 30, 2016, down 59.98 percent or $247.30 million from $412.30 million on Nov. 30, 2015.
Working capital drops significantly
Paychex has witnessed a decline in the working capital over the last year. It stood at $431.60 million as at Nov. 30, 2016, down 27.17 percent or $161 million from $592.60 million on Nov. 30, 2015. Current ratio was at 1.11 as on Nov. 30, 2016, down from 1.15 on Nov. 30, 2015.
Days sales outstanding went up to 47 days for the quarter compared with 33 days for the same period last year.
Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
