H&R Block Inc.
) adjusted loss of 1 cent per share in fiscal third-quarter 2012,
ending January 31, lagged the Zacks Consensus Estimate of 6 cents.
Loss narrowed from 6 cents incurred in the year-ago period.
Adjusted loss for the quarter was $3.6 million, comparing favorably
with loss of $11 million reported in fiscal third-quarter 2011.
Including income from discontinued operations of $0.2 million,
the company reported a net loss of $3.3 million or 1 cent per share
in the quarter under review, compared with loss of $12.7 million or
4 cents a share incurred in fiscal third quarter of 2011.
Revenue in the quarter under review was $663.7 million, down
2.5% from $680.3 million recorded in the year-ago quarter. Reported
revenue considerably lagged the Zacks Consensus Estimate of $696
Total expense in the quarter totaled $667 million, lower by 5.8%
over prior year quarter.
The company reported an operating loss of $3.7 million, narrower
than the loss of $27.9 million in the fiscal third quarter of
revenue was $655.7 million in the fiscal third quarter of 2012,
reflecting adecline of 2.5% as higher revenues from tax preparation
were offset by lower revenues from financial product.
The segment pre-tax income was $31.7 million, nearly an
eightfold increase over the prior-year quarter. The upsurge in
income was driven by lower credit losses and decreased impairment
and litigation related charges. However, lower revenue and higher
marketing expense were partial offsets.
Corporate and Eliminations
posted revenue of $7.58 million, a trifle higher than $7.49 million
in the prior-year quarter.
Segment pre-tax loss in the quarter was $32.7 million, wider
than the loss of $30.1 million in the year-ago quarter.
H&R Block ended fiscal third quarter 2012 with cash and cash
equivalents of $1.25 billion much below $1.50 billion at the end of
fiscal third quarter 2011. Total outstanding long-term debt at the
reported quarter end was $0.41 billion, substantially lower than
$1.04 billion at the end of fiscal third quarter 2011.
Net cash used in operating activities during the first nine
months of fiscal 2012 was $1.38 billion, compared with $1.51
million used in the year-ago period.
On December 8, 2011, the board of directors of H&R Block
authorized an increase of 33% in its dividend. The company will now
pay a dividend of 80 cents per share, up from 60 cents per share
), which competes with H&R Block, reported a fiscal second
quarter 2012 adjusted earnings of 42 cents per share, beating the
Zacks Consensus Estimate of 36 cents. The outperformance came on
solid consumer tax revenue as well as effective management of
marketing, sales, and employee expenses.
We retain our Neutral recommendation on H&R Block. The
quantitative Zacks #4 Rank (short-term Sell rating) for the company
indicates downward pressure on the shares over the near term.
BLOCK H & R (
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