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Paychex 4Q profit unchanged, outlook disappoints

ROCHESTER, N.Y. (AP) -- Payroll processor Paychex's said Wednesday that net income in the fiscal fourth quarter was nearly unchanged from the year before, despite higher sales, as costs increased and taxes took a bigger bite.

Profit in the three months through May 31 came to $123.5 million, or 34 cents per share. Revenue rose 6 percent to $585.3 million, helped by price increases for Paychex's payroll and retirement services.

Analysts polled by FactSet expected earnings of 37 cents per share on revenue of $585.9 million.

Expenses rose 5 percent, to $373.5 million, as the company spent more on developing new products and general and sales costs grew. Income taxes increased 21 percent, to $89.7 million.

For the current year, which runs through May 2014, Paychex's outlook fell short of market expectations. The company forecasts net income growing 8 to 9 percent, to about $615 million to $620 million. Analysts predicted $621 million.

Shares fell 99 cents, or 2.6 percent, to $37 in aftermarket trading. The stock closed at $37.99. It is up 22 percent this year.