H&R Block Inc. (HRB) narrowed its fiscal second-quarter loss more than expected, thanks to a strong Australian tax season and corporate efforts to cut costs.
Lifted by an 8 percent increase in tax returns prepared in Australia, total revenue during the third quarter rose 6 percent to $137.26 million. Total net loss for the most recent quarter was $105.24 million, or 39 cents per share, compared to $141.72 million, or 47 cents per share, in the year prior quarter. Excluding certain items, net loss from continuing operations was 37 cents per share. Wall Street analysts were expecting a net loss of 40 cents per share on revenue of $130.47 million.
The Kansas City, Missouri-based company generally loses money in the second quarter because of the seasonality of its U.S tax business.
To that end, H&R Block President and CEO Bill Cobb said Thursday, “The U.S. tax season is right around the corner and we believe we’re on pace to deliver significant earnings and margin expansion in fiscal 2013.”
Total expenses dropped from $335.63 million in fiscal Q2 2012 to $302.34 million in fiscal Q2 2013. For the first six months of the 2013 fiscal year, expenses have contracted to $571.24 million from $640.86 million in the year prior period.
H&R Block says that it is on pace to deliver $85 million to $100 million in pretax earnings in fiscal 2013.
As of October 31, 2012, the company had $3.9 billion in total assets, including $1.3 billion in cash and equivalents, and $3.2 billion in total liabilities.
In October, H&R Block said that it retained Goldman Sach (GS) to help it explore options related to its H&R Block Bank operations pertaining to increased capital requirements of the Dodd-Frank Act.
Earlier this week, the tax preparer reported a new pact with select national retailers to launch its new Emerald Prepaid MasterCard, which includes perks such as instant cash rewards and a mobile check deposit platform. The new initiatives also coincide with H&R Block’s launch of new apps for mobile phones.
Ending the Wednesday trading session at $17.37, shares of HRB have closed in the red for four consecutive days (perhaps counting-on a wider loss than reported), but are still ahead by about 15 percent in 2012.