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Paychex's 3Q net income up 7 pct. as revenue grows

ROCHESTER, N.Y. (AP) -- Paychex Inc. said Wednesday its third-quarter net income rose 7 percent as it marked strong growth in revenue.

The payroll and benefits service provider reported that it earned $144.5 million, or 40 cents a share, in the three months ended Feb. 28. That compares with $135.4 million, or 37 cents a share, in the year-earlier quarter.

Paychex's third-quarter service revenue increased 4 percent to $582.4 million, with improved growth in revenue from payroll services as well as double-digit rate gains in human resource services.

Analysts surveyed by FactSet forecast quarterly earnings per share of 39 cents on revenue of $592.8 million, on average.

The company affirmed its forecast for its fiscal 2013 ending May 31. It expects net income to increase by 5 percent to 7 percent and total service revenue, which excludes interest revenue, to rise by 5 percent to 6 percent. Analysts expect earnings per share of $1.59 and revenue of $2.33 billion.

Shares of Paychex, based in Rochester, N.Y., slipped 8 cents to close at $34.76. They rose 42 cents in after-hours trading following release of the third-quarter results.