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H&R Block, Inc. Message Board

  • bluecheese4u bluecheese4u Dec 6, 2012 9:02 AM Flag

    H&R Block's Net Loss From Continuing Operations Improves 18 Percent; 11 Percent Improvement on Adjusted Basis

    H&R Block's Net Loss From Continuing Operations Improves 18 Percent; 11 Percent Improvement on Adjusted Basis

    Dec 06, 2012 (Marketwire via COMTEX) --H&R Block, Inc. (NYSE: HRB) today announced financial results for its fiscal second quarter ended Oct. 31, 2012. Due to the seasonality of its U.S. tax business, the company typically reports a second quarter operating loss.

    Second Quarter 2013 Highlights1

    •Total revenues grew 6 percent to $137 million due primarily to a strong tax season in Australia
    •Net loss from continuing operations improved 18 percent to $101 million, or $0.37 per share2
    •Adjusted net loss from continuing operations improved 11 percent to $100 million, or $0.37 per share
    •The company remains on pace to deliver $85 to $100 million of pretax earnings from cost reduction initiatives in fiscal 2013

    Second Quarter Results From Continuing Operations


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    • I haven't listened to the call (waiting for the transcript to be released so I can study the words). Marketwatch article quotes a couple of things that confuse me:

      "Deliver industry-leading tax preparation plus financial products and services"

      Hasn't HRB tried financial products and services and ended up selling the division? I'm thinking investments here, which flopped because the advisers couldn't make any money on small accounts and the company wasn't attracting people who could bring big accounts. Offering IRAs was another product that annoyed tax pros who had to offer them and didn't help clients because of the high fees. So they're going to try again, or is there some other type of "financial products and services" up their sleeves?

      "Create a year-round presence and relationship with clients."

      IMHO, this is the ONLY way to make it in the tax prep industry. I work at an accounting firm and, while we don't connect with all our clients outside of tax season, they do keep us busy all year with issues--from IRS or state letters to marriage or divorce, selling/buying a business, cashing in investments, inheritances, advice, etc. etc. We are keeping a close eye on Washington right now and will notify all our clients who will be affected if there is finally an AMT patch, brackets change, itemized deductions get phased out, or anything that will affect their final estimated payments. I don't understand how the year-round relationship fits with Block's business model. Nearly all of their preparers are seasonal, so when a client has a tax issue they have to see someone else (and call an 800 number to find an office that can be dozens of miles away and is open only a few hours a week). When I worked there and had clients who knew something was coming up the pike or who had complex tax situations, I gave them my home phone number. When they called during the off season, I arranged to meet them in my old office (I was allowed to keep the key even though the office was closed) or see them at the premium office. Most tax pros didn't have that freedom, so their clients were left hanging or had to see a stranger (who is paid minimum wage for the privilege of working summers). And is anyone responsible for notifying clients who will be affected by changes in tax policy?

      I like Block's vision in this area; I just don't see how they can pull it off.

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