H&R Block Rises After Earnings Beat

H&R Block(HRB Quote) shares jumped nearly 10% Monday after the tax preparer reported a solid fourth quarter with revenues jumping 11% to $2.6 billion.

The company recorded net profit for the quarter at $1.66 per share -- a big improvement over the previous year's loss of 26 cents per share. Factoring out its former Option One mortgage unit, H&R Block earned $691.1 million, or $2.11 a share, vs. $591.2 million, or $1.81 a share, in the year-ago period. This easily beat the consensus expectation of $2.03 a share reported by Thomson Reuters.

"During fiscal 2008, H&R Block served the tax needs of 23.5 million clients, the highest level in our history," Chairman Richard Breeden said in a company statement. "Full-year earnings per share from continuing operations exceeded our expectations, and reflect the best tax season for H&R Block since 1999."

H&R Block also recorded a net loss from discontinued operations in the fourth quarter of $147.6 million, or 45 cents a share, vs. a loss of $676.8 million, or $2.07 a share, in the year-ago period. The company stopped originating mortgages through Option One in December 2007 and sold it to an affiliate of WL Ross for $1.3 billion. The sale was effective on April 30.

"Following senior management changes in late 2007, we think [H&R Block] is increasing its focus on its core tax preparer business going forward, which we view positively given its strong market share position in that business," Pearl Wang of Standard & Poor's wrote in a note.