H&R Block's (HRB) Q3 Earnings Miss Estimates, Increase Y/Y
H&R Block, Inc. HRB reported disappointing third-quarter fiscal 2023 results wherein earnings and revenues missed the Zacks Consensus Estimate.
Third-quarter fiscal 2023 adjusted earnings per share of $4.20 (excluding 8 cents from non-recurring items) missed the Zacks Consensus Estimate of $4.51. However, earnings rose 2.2% on a year-over-year basis, primarily owing to fewer shares outstanding from share repurchases.
Revenues of $2.1 billion also missed the consensus estimate marginally but increased 2% year over year. The top line was positively impacted by a higher net average charge in the Assisted category.
Total operating expenses of $1.2 billion increased by 4.5%, mainly due to higher field wages and the timing of advertising.
H&R Block, Inc. Price, Consensus and EPS Surprise
H&R Block, Inc. price-consensus-eps-surprise-chart | H&R Block, Inc. Quote
Other Quarterly Numbers
H&R Block exited the quarter with cash and cash equivalents of $909.1 million compared with $264.5 million at the end of the prior quarter. Long-term debt and line of credit borrowings were $1.48 billion compared with $2.1 billion in the previous quarter.
H&R Block used $1.28 billion of cash in operating activities while capex was $15.2 million. HRB paid out dividends of $44.6 million in the quarter under review.
Updated 2023 Outlook
H&R Block expects revenues in the range of $3.440-$3.465 billion (prior view: $3.535-$3.585 billion). The midpoint of the guided range ($3.45 billion) lies below the current Zacks Consensus Estimate of $3.55 billion.
Adjusted EPS is projected to be between $3.65 and $3.80 (prior view: $3.7 and $3.95). The midpoint of the guided range ($3.725) is slightly below the current Zacks Consensus Estimate of $3.86.
EBITDA is anticipated to be between $895 million and $910 million (prior view: $915 million and $950 million). The effective tax rate is still expected to be around 22%.
H&R Block currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots of Some Service Providers
Omnicom OMC reported better-than-expected first-quarter 2023 results.
OMC’s earnings of $1.56 per share beat the Zacks Consensus Estimate by 13% and our estimate by 11.4%. EPS increased 12.2% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 2.3% and our estimate by 1.4%. The top line increased 1% year over year.
Equifax EFX also reported better-than-expected first-quarter 2023 results.
EFX’s adjusted earnings of $1.43 per share beat the consensus mark by 4.4%. However, the bottom line declined 35.6% from the year-ago figure. Total revenues of $1.3 billion surpassed the consensus estimate by 1.5%. The top line decreased 4.5% year over year.
ManpowerGroup MAN reported lower-than-expected first-quarter 2023 results.
MAN’s adjusted earnings of $1.61 per share lagged the consensus mark by 0.6% but matched our estimate. Revenues of $4.8 billion missed the consensus mark by 1.3% and our estimate by a slight margin. The top line decreased 7.6% year over year.
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