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Paychex Q3 Profit Down

Paychex Inc. (PAYX) reported that its net income decreased 12% to $324.6 million and earnings per share decreased 11% to $0.90 per share for the third-quarter ended February 28, 2019 from last year.

Net income and adjusted net income for the three months ended February 28, 2018 were impacted by one-time net tax benefits recognized as a result of the Tax Cuts and Jobs Act.

Adjusted net income and adjusted earnings per share, both non-GAAP measures, each increased 3% to $322.4 million and $0.89 per share, respectively, for the third quarter.

Total revenue of $1.1 billion for the three months ended February 28, 2019, an increase of 14% from $0.9 billion for the same period last year. Excluding the acquisition of Oasis Outsourcing Group Holdings, L.P., completed during December 2018, total revenue increased approximately 7% compared to the same period last year.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.88 per share and revenues of $1.07 billion for the third-quarter. Analysts' estimates typically exclude special items.

The inclusion of Oasis, which was completed during the third quarter, is expected to have an incremental impact to total revenue in the range of $155 million to $175 million for fiscal 2019. Excluding one-time costs related to the acquisition, Oasis is anticipated to have minimal impact on earnings per share. One-time acquisition and integration costs are anticipated to impact earnings per share by approximately $0.03 per share for fiscal 2019.

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