H&R Block Inc
) reported earnings from continuing operations of $3.36 per share
for the fourth quarter of fiscal 2014, ended Apr 30. Earnings
outpaced the Zacks Consensus Estimate by 5.3% and year-ago earnings
by nearly 34%.
The outperformance came largely on the back of an improved top
Shares of H&R Block gained about 3.18% in the pre-market
session, indicating that the market has taken this release
Quarterly Operational Performance
H&R Block's revenues came in at $2.56 billion, improving 16.5%
year over year driven by revenue growth at both its segments.
Revenues outpaced the Zacks Consensus Estimate of $2.46 billion.
Total expense of H&R Block was $1.1 billion, 2.6% higher than
the prior-year quarter, primarily due to increased cost of revenues
as well as higher selling, general and administrative expenses.
Operating income in the reported quarter was $1.46 billion,
reflecting an increase of almost 30% as magnitude of increase in
revenues more than compensated for the magnitude of increase in
Adjusted earnings from continuing operations in fiscal 2014 were
$1.67 per share, which surpassed the Zacks Consensus Estimate of
$1.63 and improved 5% over fiscal 2013.
Revenues for the full fiscal improved 4.1% year over year to $3.024
billion on strong Tax Services revenues. Revenues were ahead of the
Zacks Consensus Estimate of $2.926 billion.
revenues in the reported quarter increased about 18% to $2.6
billion. Fiscal revenues increased 4.2% to $3.0 billion, fueled by
better mix and changes to the pricing strategy in its retail
locations, digital tax software product enhancements and
monetization efforts, along with increased Tax Plus financial
services product revenues.
Pre-tax income improved 29% year over year to $1.49 billion. Fiscal
pre-tax income increased 5.5% to $866 million.
Corporate and Eliminations
revenues of $7.3 million in the fourth quarter were up 4.4% year
over year. Fiscal revenues decreased 11% to $24.8 million.
The segment's pre-tax loss in the quarter was $13.4 million,
narrower than the loss of $26.5 million in the year-ago quarter.
Fiscal pre-tax loss narrowed largely on account of a non-recurring
gain from the sale of residual interests in mortgage loan
H&R Block exited fiscal 2014 with cash and cash equivalents of
$2.3 billion, up 21% on a year-over-year basis. Total outstanding
long-term debt of H&R Block at year end was $506 million,
improving 44.1% year over year.
Net cash provided by operating activities in fiscal 2014 was $10.7
million, comparing favorably with $111 million used in the year-ago
On Jul 1, 2014, H&R Block will pay a dividend of 20 cents per
share to shareholders of record as of Jun 16, 2014. The dividend
will mark the 207th consecutive quarterly payment to shareholders
since the company went public in 1962.
) reported adjusted earnings per share from continuing operations
of $3.42 in the third quarter of fiscal 2014, which missed the
Zacks Consensus Estimate of $3.50. Nevertheless, earnings increased
18.8% on a year-over-year basis.
After five straight quarters of missing the expectation, the tax
preparer is back on the positive surprise track on the strength of
higher tax revenues. As most of the clients file their tax returns
from January through April each year, substantially all of H&R
Block's revenues from income tax return preparation and related
services and products are received during this period.
H&R Block's leading position in the tax preparer market along
with its strategic initiatives to grow its business by gaining and
retaining customers augur well for long-term growth. Its efforts to
return value to shareholders will also help retain investor
H&R Block presently carries a Zacks Rank #3 (Hold).
Better-ranked stocks from the same sector include
Weight Watchers International, Inc
). Both stocks sport a Zacks Rank #1 (Strong Buy).
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