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H&R Block Drops as Revenue Falls on Delay to Start of Tax Season

H&R Block reported a fiscal third quarter loss that was better than estimates, but revenue disappointed.
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Shares of tax prep company H&R Block  (HRB) - Get H&R Block, Inc. (HRB) Report were falling after hours Tuesday after the company reported light fiscal third-quarter revenue that was negatively impacted by a delayed start to the U.S. tax season. 

The Kansas City company reported a quarterly net loss of $1.17 per share on revenue of $308 million. Analysts were expecting a loss of $1.29 per share on revenue of $341 million, according to FactSet. 

“Despite seeing a delay to the start of the tax season, we’re well positioned to finish the fiscal year strong and to continue on our path toward long-term sustainable growth," CEO Jeff Jones said. 

The delay and the accompanying later-than-usual opening of the IRS e-file portal resulted in a 41%, or $211 million, decline in revenue year-over-year, according to the company. That decline was partially offset by an increase in small business payments processing and payroll volume at the company's Wave subsidiary. 

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"We're on target to deliver our financial outlook for the year," said Tony Bowen, H&R Block's chief financial officer. "This will drive strong free cash flow and significant return of capital to our shareholders through dividends and share repurchases."

As previously announced, H&R Block will pay its quarterly cash dividend of 26 cents per share on April 1 to shareholders of record as of March 16. 

The company said it was able to cut operating expenses by $100 million, or 15% year- over-year, although pretax losses increased by $106 million to $284 million. 

The fiscal fourth quarter is H&R Block's big sales period with analysts expecting revenue of $2.43 billion.

H&R Block shares were falling 1.1% to $19.54 after hours Tuesday.