The loss of jobs at client companies helped push Paychex revenue to $496.6 million for the second quarter ended November 30, down 5 percent from $524.2 million a year earlier. And the company reiterated its view that continued economic weakness would leave its revenue for the year ending May 31 off by 2 percent to 5 percent. However, CEO Jonathan Judge issued a statement that key indicators were stable for the second straight quarter.
But net income dropped to $125.9 million for the most recently ended quarter, a decrease of 10 percent from $140.2 million a year earlier. The economy also hurt results because interest rates sharply reduced earnings on funds held for clients and investment income, which dropped to $13.6 million, a 31 percent decline from just under $20 million a year ago.
Payroll service revenue, the biggest single source of income, fell to $350.8 million in the most recently ended period, down 7 percent from $376.1 million.The economy hurt payroll in two ways: First checks per client declined by 3.7 percent for the quarter, compared to last year, although that was better than the 5 percent year-over-year decline for the first quarter. Meanwhile, the slow pace of new business formations meant fewer new clients.
HR service revenue rose to $132.2 million, up 3 percent from $128.3 million and Paychex anticipated that this revenue source would show 3-percent-to-6 percent- growth over fiscal 2009.
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards. Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that. A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
