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Intuit (INTU) Updates Q2 Outlook to Reflect Late Tax-Season Opening

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Intuit INTU lowered its second-quarter fiscal 2021 outlook to reflect the impact of late tax-season opening. The maker of TurboTax software stated that the Internal Revenue Service (IRS) will be accepting and processing tax returns from Feb 12 this year compared with Jan 27 last year.

For the second quarter, Intuit now projects revenues between $1.570 billion and $1.575 billion, significantly down from the prior projection of $1.935-$1.965 billion. Its updated guidance suggests a year-over-year decline of 7.1-7.4%. The Zacks Consensus Estimate for revenues is pegged at $1.88 billion, reflecting year-over-year growth of 11.1%.

Intuit forecasts operating loss in the band of $25-$30 million on GAAP basis and operating profit between $230 million and $235 million on a non-GAAP basis. Earlier, the company had projected GAAP and non-GAAP operating profit of $171-$191 million and $455-$475 million, respectively.

Intuit Inc. Price and Consensus

Intuit Inc. Price and Consensus
Intuit Inc. Price and Consensus

Intuit Inc. price-consensus-chart | Intuit Inc. Quote

The QuickBooks software maker has also lowered and trimmed its earnings guided range. The company now projects GAAP earnings per share between 6 cents and 7 cents, instead of the previous guidance of 43-49 cents.

On non-GAAP basis, Intuit now anticipates to report earnings of 67-68 cents per share. Previously, it had forecast earnings in the band of $1.25-$1.31 per share.

Fiscal 2021 Guidance Reiterated

Intuit reiterated its fiscal 2021 outlook, issued on Dec 7, 2020, suggesting that the late tax-season opening would have no impact on its full-fiscal results. Notably, the company had updated the fiscal 2021 outlook in December 2020, following its successful completion of the Credit Karma acquisition.

Intuit expects Credit Karma to add $545-$580 million to the company’s fiscal 2021 revenues. The acquisition is likely to generate segment operating income between $15 million and $35 million.

Considering the aforementioned synergies from the Credit Karma acquisition, the company had raised its fiscal 2021 sales guidance to $8.810-$8.995 billion from the $8.265-$8.415 billion estimated previously. The updated outlook reflects year-over-year growth of 15-17%, up from the earlier projection of an 8-10% increase.

Nonetheless, Intuit has lowered its adjusted earnings outlook for fiscal 2021. The reduction in bottom-line forecasts might be due to the elevated expenses associated with the Credit Karma buyout. The fiscal 2021 earnings outlook has been lowered to $8.20-$8.40 per share from $8.40-$8.55.

Zacks Rank and Key Picks

Intuit currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the broader technology sector include Shopify SHOP, Zoom Video Communications ZM and Apple AAPL, all flaunting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Shopify, Zoom and Apple is currently pegged at 32.5%, 25% and 11.5%, respectively.

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