NEW YORK (AP) -- Shares of Intuit advanced Wednesday after the maker of TurboTax tax-filing software reported higher net income for its third quarter, beating Wall Street expectations.
THE SPARK: The company, which also makes finance programs Quicken and QuickBooks, noted that its improved results came despite a "challenging" tax season.
For the quarter, earnings rose to $822 million, or $2.71 per share, from $734 million, or $2.42 per share, a year ago. Excluding one-time items such as writing down the value of a health business unit, earnings came to $2.97 per share, topping Wall Street's forecast of $2.93 per share.
Revenue rose 13 percent to $2.18 billion, with a boost from the small business division, which houses QuickBooks. Analysts polled by FactSet expected $2.19 billion.
THE BIG PICTURE: The tax season got a late start this year because of changes to the tax code in legislation to avert big scheduled tax hikes. But Intuit also acknowledged that it didn't execute well in targeting the tax store segment of the market, noted Janney analyst Yun Kim said.
Since the company introduced "live help" as the cornerstone of its strategy to penetrate the tax store segment two years ago, Kim noted that execution hasn't lived up to expectations. She said Intuit may have to revisit its long-term consumer tax revenue growth guidance of 8 percent to 12 percent if it doesn't pursue other strategies as well, given the soft employment environment and "emerging signs of slower adoption" of its Turbo Tax Online.
Still, the small business group revenue rose 17 percent.
SHARE ACTION: Intuit's stock rose $2.16, or 3.7 percent, to $60.05 in afternoon trading. Its shares have traded in a 52-week range of $54.30 to $68.41.