Earnings Preview: Paychex, Inc. (PAYX)

Paychex, Inc. PAYX is currently lower on the session by 0.88%, trading at $26.99. The company is scheduled to report earnings today, after the closing bell. • Estimates The Street is looking for Q1 earnings per share of $0.34 on revenue of $507.53 million. These estimates have stayed the same over the past 90 days. The EaringsWhispers.com Whisper number for PAYX is $0.35. • Guidance The Street is looking for Q2 EPS of $0.35 on revenue of $507.78 million. The full year 2011 estimates are $1.36 per share on revenue of $2.06 billion; FY 2012 is at $1.48 per share on revenues of $2.19 billion. • Technical Picture PAYX has been falling for the past six months, though appears to have found support near the $25.00 level, which is historical support. Shares have since risen and are now above the 18-day and 50-day moving averages. The 200-day remains above shares, near $27.80. • Volatility Both historical volatility and implied volatility have been down-trending over the past few months after a spike higher in mid-May. Currently HI is at 18% and IV is at 21%. The front month $24.83 straddle is trading at 26.34%; the November $27.00 straddle is trading at 23.12%. Vol is skewed toward the puts in both months. Paychex, Inc. is a provider of payroll, human resource, and benefits outsourcing solutions for small to medium-sized businesses. As of May 31, 2010, the company serviced approximately 536,000 clients. As of May 31, 2010, it serviced approximately 1,700 clients in Germany through four offices. It offers a portfolio of services and products that allow its clients to meet their payroll and human resource needs. These services include payroll processing, payroll tax administration services, employee payment services, regulatory compliance services, Paychex HR Solutions, retirement services administration, insurance services, eServices, and other human resource services and products. In October 2009, the company announced the sale of Paychex Time and Attendance Inc., a time and attendance company serving mid- to large-sized businesses, to Kronos Incorporated.