Intuit Inc. (INTU) reported first quarter 2012 adjusted loss of 18 cents per share, narrower than the Zacks Consensus Estimate of a loss of 20 cents.
Revenue
Intuit reported revenues of $594.0 million in the first quarter of 2012, up 11.7% from $532.0 million in the prior-year quarter. Reported revenues also surpassed management’s guidance range of $575.0 million to $585.0 million.
Product revenues increased 2.8% year over year to $222.0 million, while Services and Other revenues climbed 17.7% from the prior-year quarter to $372.0 million.
Business segment-wise, the company’s Small Business Group was the best performing segment in the quarter with 13.0% revenue growth and marked the seventh consecutive quarter of double-digit revenue growth in Small Business. The company’s results were also in line with its expectations.
Consumer Tax revenue was $41.0 million in the first quarter, up $12.0 million from a year ago. The upside in segment revenue was attributed to the extension of tax filing date to October 17.
The Financial Services revenue increased 9.0% during the reported quarter. Consistent with its growth strategy, the company is adding financial institutions as well as end users to its portfolio in order to drive further growth.
Operating Results
The GAAP operating loss stood at $94.0 million compared with $104.0 million in the year-earlier quarter. Excluding special items like amortization and professional fees, non-GAAP operating loss was $69.0 million compared with a loss of $88.0 million in the year-ago quarter. The company continues to incur higher cost of revenue and sales and marketing as well as R&D expenses.
GAAP net loss in the quarter was $64.0 million or 21 cents per share, narrower than $70.0 million or 22 cents per share delivered in the year-ago quarter. The adjusted net loss in the quarter stood at $54.9 million or 18 cents per share versus a loss of $60.7 million or 19 cents per share in the year-ago quarter.
Balance Sheet & Cash Flow
Intuit ended the quarter with cash, equivalents and investments of $1.05 billion, down from $1.42 million in the previous quarter. Accounts receivables were $166.0 million compared with $171.0 million in the previous quarter. As of October 31, 2011, long-term debt remained flat at $499.0 million.
Intuit had $110.0 million of operating cash in the first quarter versus $172.0 million in the prior quarter. During the quarter, Intuit repurchased shares worth $255.0 million.
Outlook
For the second quarter of fiscal 2012, the company expects revenues in the range of $1.0 billion to $1.02 billion. GAAP operating income is expected in the range of $155.0 million to $175.0 million. Non-GAAP operating income is estimated in the $210.0 million to $230.0 million range. GAAP diluted EPS is projected in the range of 30 cents to 34 cents. The company also expects non-GAAP diluted EPS in the 43 cents to 47 cents range.
For fiscal 2012, the company expects revenues in the $4.185 billion to $4.285 billion range, representing growth of 9.0% to 11.0%. GAAP operating income is estimated to be between $1.185 billion and $1.21 billion, reflecting growth of 18% to 20%. Non-GAAP operating income is projected to be $1.4 billion – $1.425 billion, representing growth of 12.0% -14.0%. GAAP diluted EPS is expected to grow in the range of 19.0% – 24.0% to $2.38 to $2.47. Non-GAAP diluted EPS is expected between $2.85 and $2.94, indicating a growth of 14.0% to 17.0%.
Our Take
Intuit is a leading provider of business and financial management solutions to small and medium-sized businesses, consumers, accounting professionals and financial institutions. The company delivered decent first quarter results, but still delivered a loss, as it was unable to curtail its expenditure.
Notwithstanding the impressive performance of the Small Business group, the company did not witness any meaningful growth in product revenues. The financial management revenue grew at par with the street expectation, mainly driven by the release of QuickBooks 2012 during the quarter.
Currently, Intuit has a Zacks #3 Rank, which translates into a short-term Hold rating.
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