H&R Block Inc. (HRB) Thursday reported a third-quarter loss that widened from a year ago, as inordinate delay in the US tax season led to a 29 percent slump in revenues, missing Wall Street estimates.
H&R Block said that U.S. filings will fully normalize and grow 1 to 2 percent by the end of the tax season. The company expects to deliver significant earnings and margin expansion in fiscal 2013, partly due to its cost pruning efforts.
Shares of the company gained over 4 percent in after-hours trade on the New York Stock Exchange.
Tax legislation before the advent of the tax season and the ensuing delay in opening the IRS e-file system, led to an undue delay to the start of the US tax season, the company said.
Through February 28, total US tax returns prepared by and through H&R Block were lower by 5.8 percent, with industry-wide US tax filings down about 8 percent.
H&R Block, which has cut jobs and shut unprofitable offices, reported third-quarter revenues of $472 million, compared with $663 million a year ago. Analysts polled by Thomson Reuters estimated revenues of $563.60 million for the quarter.
The company deferred $15 million of revenue to its fourth quarter, as the IRS did not accept returns that included certain forms prior to January.
"We entered this tax season with a very thoughtful plan and while we've had to make some adjustments due to the unprecedented delays and competitive factors, I am pleased with our execution to date," said its CEO Bill Cobb.
The Kansas City, Missouri-based company reported a quarterly net loss of $17.7 million or $0.07 per share, compared with a net loss of $3.35 million or $0.01 per share last year.
Results for the quarter included favorable discrete tax items of about $43 million.
Excluding items, adjusted loss from continuing operations for the quarter was $60 million or $0.22 per share.
Analysts on consensus expected a loss of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.
H&R Block stock closed Thursday at $24.98, down 1.11%, on a volume of 6.9 million shares. In after hours, the stock gained $1.01 or 4.04% at $25.80. In the past year, the stock has traded in a range of $14.35 to $25.50.
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