Writedown Hits H&R Block
H&R Block (HRB) swung to a loss for its fiscal third quarter, due to writedowns that the tax services provider had to take on its mortgage business.
In the quarter, which ended Jan. 31, H&R Block had a net loss of $44.7 million, or 14 cents a share, compared to a year-ago profit of $12.1 million, or 4 cents a share.
In the quarter ended Jan. 31, H&R Block's profit from continuing operations was $25 million, or 8 cents per share, compared to a loss of $30.2 million, or 9 cents a share, a year earlier. The year-earlier quarter included an after-tax charge of $43 million, or 10 cents a share, of litigation settlement fees and associated legal costs, it said.
Revenue from continuing operations rose 10% from a year earlier to $955 million.The Kansas City, Mo., company reported its mortgage results as discontinued operations, as it's seeking to sell that business. The mortgage operation posted a loss of $69.7 million, or 22 cents a share, compared to a year-ago net profit of $42.4 million, or 13 cents a share. The loss from discontinued operations "reflects an increase of loan loss reserves of approximately $111 million," it says. H&R Block announced in November that it was considering "strategic alternatives" for its subprime mortgage business, Option One, which includes a possible sale. The company said Thursday that it expects to make an announcement about that next month.
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