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How Tax Company Earnings Fared In Q4

Manikandan Raman

Both H & R Block Inc (NYSE: HRB) and Intuit Inc. (NASDAQ: INTU) reported solid quarters despite a slow start to the tax season.

H&R Block Earnings, Market Share

For its third quarter, H&R Block reported a narrower loss versus Street as its sales topped the consensus estimate.  H&R Block got back some market share during its third quarter amid higher promotions and a tight lid on operating costs.

The company reported a third-quarter loss of $0.50 per share vs a $0.53 per share loss estimate on sales of $451.882 million vs an estimate of $446.4 million.

The H&R Block assisted and do-it-yourself (DIY) tax preparation businesses achieved market share gains in the first half of the tax season.H&R Block’s return volume outperformed industry results when compared to IRS data reported through February 24.

H&R Block said, in the Assisted category, the company outperformed the industry with a drop of 8 percent versus the IRS reported decline of 13 percent. In the DIY category, H&R Block outperformed the industry with a decline of 5 percent compared to the IRS reported decrease of 8 percent.

"We are delivering what we promised in December. Through aggressive Assisted and DIY offers, we are achieving our goal of new client growth and I'm pleased that we gained market share in both the Assisted and DIY tax preparation categories in the first half of the tax season," Bill Cobb, H&R Block's CEO said in a press release.

Stellar Quarter From Intuit

Intuit too delivered stellar earnings for its second quarter last month, with an EPS beat and reiterated full-year outlook.Total QuickBooksoOnline subscribers grew 49 percent to more than 1.87 million.

·         Intuit Reports Q2 Adj. EPS $0.26 vs $0.25, Sales $1.016 vs $ $1.01B Est.

However, through Feb. 18, sales of TurboTax units declined 5 percent versus the year-ago period, as the tax season is off to a slow start for all preparation methods.

The most recent Internal Revenue Service data through Feb. 17 showed total e-filed returns down 13 percent while self-prepared e-filings were down approximately 11 percent and assisted e-filings down 16 percent.

“TurboTax e-filed returns are down 10 percent vs. prior year, indicating we are maintaining share at this juncture in the tax season,” Dan Wernikoff, executive vice president and general manager of Intuit’s TurboTax business, said in a press release.

Intuit also reiterated its full-year outlook, including non-GAAP EPS view of $4.30 to $4.40, Consumer Tax revenue growth guidance of 6 to 8 percent and total company revenue forecast of 7 to 9 percent at $5 billion to $5.1 billion. The company also stuck to its QuickBooks Online subscribers outlook of 2.2 million.

How Liberty Tax Fared In Q3

Another peer, Liberty Tax Inc (NASDAQ: TAX) reported an earnings beat for its third quarter. But, an exec at the company said "[We are] clearly not satisfied with how we have performed in comparison to the market."   Liberty Tax Service Q3 EPS $0.19 vs $0.10 Est, Sales $48.4M vs $44.3M Est

Shares of H&R Block have gained more than 15 percent following strong quarterly results. At last check, shares of H&R Block climbed 15.98 percent to $24.17, while Intuit were down 0.26 percent to $125.07. Liberty Tax gained 5 percent to $14.95.

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