NEW YORK (AP) -- Shares of Intuit Inc. tumbled Thursday after the company cut its profit predictions for the fiscal third-quarter and full year.
THE SPARK: Citing a "tough tax season," Intuit, which makes Turbo Tax and other personal finance software, said late Wednesday that it now expects to post adjusted third-quarter earnings of $2.92 to $2.94 per share on $2.17 billion to $2.18 billion in revenue.
It previously projected net income of $2.99 to $3.04 per share and revenue of $2.22 billion to $2.28 billion. Analysts polled by FactSet expected earnings of $3.01 per share on $2.25 billion in revenue.
For the full year, Intuit said net income will total between $3.31 and $3.35 per share, with revenue around $4.5 billion. That's down from earlier estimates of $3.40 to $3.46 per share and revenue of $4.55 billion to $4.65 billion.
THE BIG PICTURE: Intuit said results from its consumer tax business haven't been as strong as it expected. As of April 16, sales of TurboTax units were up 3 percent to 25.3 million and electronic filings had increased 4 percent to 26.5 million.
The company said it expects TurboTax revenue to grow about 4 percent for the year.
THE ANALYSIS: Raymond James analyst Wayne Johnson cut his rating for the stock to "Market Perform" from "Outperform."
"Consumer tax contributes about 45 percent of total company operating income annually and any slowdown in that highly profitable business will slow profitability growth for the rest of the company," Johnson wrote in a note to investors.
But Cowen and Co.'s Peter Goldmacher backed his "Outperform" rating for the stock and said investors should try to pick up shares if their price drops to the mid-$50 range.
THE SHARES: Down $7.08, or 11 percent, to $57.11 in heavy afternoon trading, after falling as low as $55.54 earlier in the day.
Over the past 52 weeks, the company's shares have traded between $53.38 and $68.41.