Paychex reported first quarter results Wednesday that beat Wall Street estimates for both earnings and sales.
The company saw net profits of just over $217 million, up 4 percent over a year ago; Revenues of $785 million were up 9 percent compared to a year ago.
But even with the solid results, the stock lost about four and a half percent on Wednesday, falling $2.77 to close at $57.50 a share.
CEO Marty Mucci says that may have been because the company lowered some of its revenue guidance.
But he says that change was a very small amount and really was just about fine tuning the company’s expectations. Mucci says Paychex had a solid quarter and is still looking for good growth through the year.
One of the reasons for that are the new regulations that may require more small businesses to look to Paychex for their human resource services.
“All the regulations that we talk about, the overtime rules coming up, minimum wage changes that change by state, and cities sometimes, all these are requiring more small and mid-sized businesses to say ‘I can’t track this.’”
Mucci says the new overtime rules that take effect in December and will put more of a burden on many small businesses.
“They’re going to have to spend money to track this and when you only have a few employees and many are remote in these small businesses , it’s very difficult to track unless you have a good system, but luckily, they have places to go like Paychex .“
Mucci says human resource services are one of the fastest growing parts of Paychex’s business.