Paychex (NASDAQ: PAYX) reported Q1 EPS of $0.60, $0.03 better than the analyst estimate of $0.57. Revenue for the quarter came in at $785.5 million versus the consensus estimate of $782.8 million.

Outlook

Our outlook for the fiscal year ending May 31, 2017 (“fiscal 2017”) is based upon current market, economic, and interest rate conditions continuing with no significant changes. Our guidance for fiscal 2017 has been updated as follows:

• Payroll service revenue is anticipated to increase in the range of 3% to 4%;
• As reported, net income is now expected to increase approximately 7%, updated to reflect the impact of the discrete tax items recognized in the respective first quarter of fiscal years 2017 and 2016; and
• The effective income tax rate for fiscal 2017 is expected to be approximately 35%, also reflecting the impact of the discrete tax items recognized in the first quarter.

Other aspects of our guidance for fiscal 2017 remain unchanged from what we provided previously. This includes the following:

• HRS revenue is anticipated to increase in the range of 12% to 14%;
• Total service revenue is expected to increase in the range of 7% to 8%; and
• Interest on funds held for clients is expected to reflect mid-single-digit growth.

For earnings history and earnings-related data on Paychex (PAYX) click here.