Earnings Preview: H&R Block Inc.

No. 2 tax preparer Jackson Hewitt Tax Service Inc. provided a possible glimpse of the rough going Wednesday as it lowered its expectations for the year, saying its preparers saw a 3 percent decline in tax returns through its first three quarters from a year ago and expected annual tax returns to decline between 12 percent and 13 percent.

BY THE NUMBERS: Analysts surveyed by Thomson Reuters expect the company to earn 10 cents per share for the quarter on $975.3 million in revenue. The company hasn't provided its own guidance for the quarter but has said it expects to earn between $1.60 and $1.70 for the year. Analysts are expecting $1.61 per share.

ANALYST TAKE: Barrington Research analyst Alexander Paris wrote in a research note that he felt the stock was attractively priced and should see a 5.8 percent increase in tax services revenue to $700 million.

"The concern, however, continues to be HRB's ongoing exposure to the mortgage market," Paris wrote, noting the company sold the last remnants of its subprime-lending Option One Mortgage Co. subsidiary more than a year ago. "While the company appears well reserved with a loan loss allowance of approximately $64 million at October 31, H&R Block Bank carried over $800 million of net mortgage loans for investment and loan losses could be higher."