H&R Block Reports Loss For 1Q Due To Costs

DAVID TWIDDY

KANSAS CITY, Mo. (AP) — H&R Block Inc. said Friday it lost $133.6 million in the first quarter, about the same as a year ago but slightly more than Wall Street expected, as acquisition expenses and other costs offset slightly higher revenues.

The nation's largest tax preparer typically records losses in its first two fiscal quarters outside the normal tax season.

Chief Executive Officer Russ Smyth told analysts in a conference call that the Internal Revenue Service expects a 1 percent to 2 percent decline in tax returns filed next year due to unemployment and other economic factors. He added that the economy will likely push more people to do their taxes themselves or to use online tax filing services.

In response, Smyth said the company is retooling its marketing message and how it operates its network of retail tax offices to attract and retain more clients. He also said economic recovery efforts this year will boost the complexity of some tax returns, requiring people to seek help.

"There are headwinds but we think we have a lot of good operational things ... that should help us gain market share to potentially offset some of the headwinds that we face," he said.