H&R Block (HRB), the largest tax preparer in the U.S., posted fiscal fourth-quarter earnings after the regular trading day on Wednesday that showed the company missing revenue estimates slightly, but falling significantly short of earnings expectations.
H&R earned $664.3 million or $2.42 per share on revenue of $2.2 billion for the quarter ending April 30th. During the prior year period, the company had earned $586.1 million, or $1.99 per share on revenue of $2 billion. Analysts had expected earnings of $2.61 per share on revenue of $2.28 billion. Adjusted for items, Q4 revenue was still short of estimates at $2.54 per share.
With increasing competition from online, do-it-yourself tax services such as Intuit Inc.’s (INTU) TurboTax, the company devoted a great deal of effort and resources over the past year to develop its own online services. The company cited a more than 3 percent increase in returns filed with its desktop software.
H&R Block also implemented cost-cutting measures, shedding some 350 jobs throughout the year, and ending a contract with Wal-Mart (WMT) that saw the company shutter its offices in the mega-retailer’s outlets.
The company hired Goldman Sachs (GS) to help with a potential sell-off of its banking unit, which could make up to $400 million available. H&R repurchased 21.3 million shares at a cost of $315 million, or $14.82 per share during the fiscal year.
The company said that it prepared 0.7 percent less returns through the fiscal year, but is expected to get a boost from the passage of the White House’s signature Affordable Care Act, as well as the assumed passage of comprehensive immigration reform.
H&R’s shares closed on Wednesday at a loss of 2 percent to $28.63, and has so far been flat early in Thursday trading. Despite the substantial earnings miss, the stock is up over 56 percent year-to-date and has nearly doubled over the past 12 months.
Michael Teague
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.
Trending Now
1
2
3
Read Next
Thought Leaders
Introducing the NEW Equities News: Transforming the world by investing in what matters most
Paula DeLaurentis
Mar 15, 2024
Economic
An opportunity for women in the clean-energy transition
Green Money
Mar 12, 2024
Economic
Making diversity in venture-capital funding a priority
Yinka Faleti
Mar 11, 2024
Environment
E-bike incentives are a costly way to cut carbon emissions, but they also promote health
The Conversation
Mar 7, 2024
3 dividend-paying health-care stocks that top analysts recommend
Benzinga
Mar 7, 2024
Economic
The true cost of food is far higher than what you spend at the grocery checkout
The Conversation
Mar 6, 2024
The Latest
Thought Leaders
Introducing the NEW Equities News: Transforming the world by investing in what matters most
Mar 15, 2024
Economic
An opportunity for women in the clean-energy transition
Mar 12, 2024
Economic
Making diversity in venture-capital funding a priority
Mar 11, 2024
Environment
E-bike incentives are a costly way to cut carbon emissions, but they also promote health
Mar 7, 2024