) reported break-even figures in fourth-quarter 2013 on non-GAAP
basis from continuous operations compared to the year-ago
quarter's earnings per share of 1 cent.
However, including stock-based compensation and its related
tax effects, Intuit reported a loss of 11 cents per share, which
was wider than the Zacks Consensus Estimate of a loss of 9
Although Intuit's revenues of $634.0 million increased 11.8%
from the year ago, it lagged the Zacks Consensus Estimate of
$658.0 million. Moreover, the reported revenues came below
management's guided range of $702.0 million to $727.0 million.
The year-over-year improvement was mainly due to broad-based
strength in all the segmental revenues.
Product revenues increased 3.3% year over year to $248.0
million, while Services and Other revenues jumped 18.0% from the
prior-year quarter to $386.0 million.
Segment wise, Small Business Group posted 13.0% year-over-year
growth based on the strength of the group's Connected services
offerings and the synergies from the acquisition of
Financial Management Solutions revenues increased 18.0%,
driven by higher subscription for QuickBooks Online and
QuickBooks Enterprise. Employee Management Solutions revenues
were up 21.0%, led by growth in Intuit Online Payroll
subscribers. Payment Solutions revenues increased 7.0%, aided by
higher volumes in the total card transactions and changes in the
Other Businesses revenues increased 4.0% during the quarter
due to the growth in global business. Moreover, revenues from
Accounting professionals recorded 29.0% growth for the quarter.
Revenues from Consumer tax was $30.0 million for the quarter.
Intuit's gross profit increased 20.2% from the year-ago
quarter to $511.0 million while gross margin increased from 75.0%
in the year-ago quarter to 80.6%.
Non-GAAP operating income came in at $9.0 million which
decreased 30.8% from the year-ago quarter. Operating margin in
the quarter was 1.4% versus 2.3% in the year-ago quarter. Total
costs and expenses increased 13.0% year over year.
Intuit's non-GAAP net income from continuing operations was
$1.0 million compared with $4.0 million in the year-ago quarter.
Excluding one-time expenses but including stock-based
compensation expenses and its related tax adjustments, net loss
came in at $33.7 million or 11 cents per share.
Balance Sheet & Cash Flow
Intuit ended the quarter with cash, equivalents and
investments of $1.7 billion versus $2.0 billion in the previous
quarter. Accounts receivables were $130.0 million compared with
$312.0 million in the previous quarter. Long-term debt remained
flat sequentially at $499.0 million.
Intuit used $194.0 million cash from operating activities
compared to an operating cash flow of $1.45 billion in the prior
quarter. Intuit repurchased shares worth $292.0 million in fiscal
2013. The company also authorized an additional $2.0 billion
share repurchase program in August. The company also raised its
quarterly dividend from 17 cents to 19 cents.
For the first quarter of fiscal 2014, the company expects
revenues in the range of $595.0 million to $605.0 million
reflecting a growth of 6% to 8% on a year-over-year basis.
Non-GAAP operating loss is expected to increase from the year-ago
period's loss of $16 million to an estimated loss ranging from
$30 million to $35 million. The company also expects its non-GAAP
loss per share to be in the range of 10 cents to 11 cents, wider
than the year-ago period's loss of 5 cents per share.
The company also provided fiscal 2014 outlook. For fiscal
2014, the company expects revenues in the range of $4.440 billion
to $4.525 billion, representing growth of 6.0% to 8.0%. Non-GAAP
operating income is projected in the range of $1.58 billion-$1.61
billion, representing 7.0% to 10.0% growth. Non-GAAP earnings per
share are expected between $3.52 and $3.60, reflecting growth of
10.0% to 13.0%.
With the restructuring in place, in fiscal 2014, Intuit
expects its Small Business Group revenues to increase in the
10.0% to 12.0% range. Revenues from the Consumer Group are
expected to increase by 3.05% to 5.0%. Professional Tax segment's
revenues are expected to increase by 0.0% to 4.0%.
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's recent realignment of its operations is expected to
yield long-term positive results.
We are positive on Intuit's growing SMB (small & medium
business) exposure and believe that the Demandforce acquisition
will continue to provide support to the segment. However, stiff
competition from the leading payroll solution provider,
) in the SMB arena, seasonality of Intuit's tax business and the
ongoing uncertainty in the economy concern us.
Currently, Intuit has a Zacks Rank #3 (Hold). Investors can
have a look at
Computer Sciences Corp
), which carry a Zacks Rank #2 (Buy).
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