H&R Block Inc. (HRB) reported a 5.7% year over year increase in total tax returns prepared for the period November 1, 2010 to March 31, 2011. Total retail returns prepared grew 2.6%, while total digital returns increased 13.3% (including 29.2% increase in online filings).
The 29.2% growth in online filings and a 1.4% increase in software-based returns were somewhat offset by a 10.2% decline in returns prepared through the Free File Alliance. Total digital tax returns, including online, software and Free File Alliance, increased 13.3%. Total digital returns excluding Free File Alliance increased 17.0%.
Net retail tax preparation fees improved from down 4.1% at February 28 to down 2.2% at March 31. The improvement resulted from continuing growth in tax return volumes during the month. Net retail tax preparation fees for the month of March improved 3.7% year over year.
For fiscal 2011, H&R Block projects 2%-2.5% year over year increase in total retail tax returns prepared. However, the company estimates retail net average fee per return to decline 2.5 to 3.5 percentage points from fiscal 2010 level.
Also, in fiscal fourth quarter ending April 30, 2011, H&R Block expects to incur an extra charge of 5 cents per share for estimated incremental credit losses on its Emerald Advance line of credit. The charge stemmed from the loss of certain prior clients resulting from the company’s inability to offer refund anticipation loans this tax season.
Over the last 7 days period, none of the analysts covering the stock revised their estimates for the first quarter of 2011. However, over the last 30 days period, 2 out of 6 analysts covering the stock raised the estimates while none lowered the same.
Over the last 7 days period none of the analysts covering the stock revised the estimates for 2011 but 1 out of 3 analysts covering the stock raised the estimate upward for 2011. Over the last 7 days and 30 days, 1 out of 8 analysts covering the stock nudged the estimate downward for 2012.
The Zacks Consensus Estimate for fourth-quarter 2011 is $ 2.15 per share. For fiscal years 2011 and 2012, the Zacks Consensus Estimates are a respective $ 1.41 per share and $ 1.61 per share.
H&R Block expects successful implementation of programs like the free 1040EZ and Second Look, and service improvement initiatives will help it to retain old clients as well as draw new clients.
The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term.
Headquartered in Kansas City, Missouri, H&R Block Inc. is a leading provider of tax preparation services. Through its subsidiaries, the company provides tax, retail banking, accounting and business consulting services and products in the U.S., Canada and Australia. It competes with Intuit Inc. (INTU).
BLOCK H & R (HRB): Free Stock Analysis Report
INTUIT INC (INTU): Free Stock Analysis Report
Zacks Investment Research
Be the first to comment