) reported first quarter 2013 adjusted loss per share of 14
cents, narrower than the Zacks Consensus Estimate of a loss of 17
cents per share.
Intuit reported revenues of $647.0 million in the first quarter,
up 12.5% from $575.0 million in the prior-year quarter. Reported
revenue was above the management's guidance range of $630.0
million to $640.0 million.
Product revenues increased 2.3% year over year to $227.0 million,
while Services and Other revenues climbed 19.0% from the
prior-year quarter to $420.0 million.
Segment-wise, Small Business Group posted an 18.0% year-over-year
growth based on the strength of the group's sub-segments.
Financial Management Solutions revenue increased 20.0%, driven by
higher subscription for QuickBooks Online, QuickBooks Enterprise
and contribution from recently acquired (May 2012) Demandforce.
Employee Management Solutions revenue was up 12.0%, led by growth
in Intuit Online Payroll subscribers. Payment Solutions revenue
increased 21.0%, aided by customer growth for Intuit's GoPayment
mobile payment solution.
The Consumer Tax segment posted 12.2% revenue decline due to
lower tax filings. Financial Services revenue was up 4.0% from
the year-ago quarter, led by higher revenue in online and mobile
banking. Accounting Professionals segment revenue increased
19.0%. Other Businesses revenue grew 5.0% on the back of Intuit's
Reported gross margin increased 90 basis points (bps) from the
year-ago quarter to 71.9%. Operating margin in the quarter was
(10.7%) versus (14.6%) in the year-ago quarter. Though total
operating expenses increased 8.5%, the percentage on total
GAAP net loss from continuing operations was $51.0 million or 17
cents per share, compared with $58.0 million or 19 cents per
share delivered in the year-ago quarter. The GAAP loss per share
was wider than the company's guided range. Excluding one-time
expenses but including stock-based compensation expenses,
adjusted net loss in the quarter was $42.7 million or 14 cents
per share versus $49.4 million or 16 cents in the year-ago
Balance Sheet & Cash Flow
Intuit ended the quarter with cash, equivalents and investments
of $558.0 million, down from $744.0 million in the previous
quarter. Accounts receivables were $184.0 million compared with
$183.0 million in the previous quarter. Long-term debt remained
flat sequentially at $499.0 million.
Intuit used $145.0 million of operating cash in the first
quarter, as against $182.0 million cash used in the prior
quarter. Capital expenditure was $70.0 million. During the
quarter, Intuit repurchased shares worth $100.0 million. The
company paid a quarterly cash dividend of 17 cents per share
valuing $50.0 million.
For the second quarter of fiscal 2013, the company expects
revenues in the range of $1.02 billion to $1.04 billion. GAAP
operating income is expected in the range of $130.0 million to
$150.0 million. Non-GAAP operating income is estimated in the
$190.0 million to $210.0 million range. GAAP EPS is projected in
the range of 27 cents to 30 cents. The company also expects
non-GAAP EPS in the 40 cents to 43 cents range.
For fiscal 2013, the company expects revenues in the $4.55
billion to $4.65 billion range, representing growth of 10.0% to
12.0%. GAAP operating income is estimated between $1.315 billion
and $1.345 billion, reflecting growth of 12.0% to 14.0%. Non-GAAP
operating income is projected at $1.57-$1.60 billion,
representing growth of 12.0% to 14.0%. GAAP diluted EPS is
expected to grow in the range of 6.0-8.0% to $2.76-$2.82.
Non-GAAP diluted EPS is expected between $3.32 and $3.38,
indicating a growth of 12.0% to 14.0%.
Intuit is a leading provider of business and financial management
solutions to small and medium-sized businesses, consumers,
accounting professionals and financial institutions. The company
delivered first quarter loss, which was expected given the fact
that revenues from QuickBooks, Consumer Tax and Accounting
Professional segments tend to be lowest during the period. But
solid execution led the quarter's result to surpass Zacks
Consensus Estimate on the bottom line.
We are encouraged by the second quarter guidance and we believe
that the main driver would be the Small Business Group.
We are positive on Intuit's growing SMB (small & medium
business) exposure and believe that the closure of the
Demandforce acquisition will provide further support to the
segment. But stiff competition from the leading payroll solution
) in the SMB arena, seasonality of Intuit's tax business and the
ongoing uncertainty in the economy concerns us.
Currently, Intuit has a Zacks #3 Rank, which translates into a
short-term Hold rating.
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