H&R Block reports smaller 2nd-quarter loss

AP News
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Posted: Dec 08, 2009 11:45 AM

H&R Block Inc. reported a smaller fiscal second-quarter loss than a year ago on Tuesday as the nation's largest tax preparer trimmed expenses and saw its tax services business improve.

The company, which typically records losses in its first two fiscal quarters outside the normal tax season, also maintained its full-year profit outlook. H&R Block prepared more than 24 million tax returns worldwide in fiscal 2009.

"Overall, we are pleased with our financial results, which continue to benefit from our expense control efforts," President and CEO Russ Smyth said in a statement.

H&R Block lost $128.6 million, or 38 cents per share, for the period ended Oct. 31. That compares with a loss of $135.9 million, or 41 cents per share, a year earlier.

The tax preparer, based in Kansas City, Mo., cut its operating expenses to $540.6 million from $576.8 million during the quarter.

Revenue fell 7.2 percent to $326.1 million from $351.5 million on weaker results in its business services segment, but tax services revenue grew to $109.3 million from $104.7 million. The company said it also benefited from a $9.7 million reduction in mortgage loan loss provisions.

Analysts polled by Thomson Reuters predicted a bigger loss of 40 cents per share on revenue of $347 million. These estimates normally exclude one-time items.

H&R Block maintained its guidance for fiscal 2010 earnings from continuing operations of $1.60 to $1.80 per share, which is in range of Wall Street's forecast for a profit of $1.62 per share.

The company lowered its long-term debt to $1 billion from $1.7 billion at the quarter's end and said it doubled its cash on hand to $1.4 billion.

Its shares fell 48 cents, or 2.3 percent, to to $20 in midday trading. The stock has traded between $13.73 and $23.27 in the past 52 weeks, and started the session down almost 10 percent for the year.