Payroll and benefits outsourcing provider Paychex Inc., said the combination of a widening credit crunch and continued weakness in the economy forced a 5 percent drop in second-quarter profits, to $140.2 million, compared to the second quarter of last year.
Meanwhile, second-period revenue rose 3 percent to $524.2 million versus the year-ago quarter.
The company's core payroll service revenue increased 4 percent, to $376.1 million for the second quarter while human resource services revenue increased 11 percent to $128.3 million over the same period.
However, Paychex said evidence of the weak economy was seen in many of the company's key financial indicators, including a 12 percent increase in client companies going out of business, a 13 percent dip in new business starts, and a 1.5 percent drop in checks per client.
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