said its losses nearly doubled in the company's fiscal second quarter. The company blamed the poor results on its mortgage business.
The tax-services provider of Kansas City, Mo., reported a loss of $156.5 million, or 49 cents a share, in the quarter that ended Oct. 31, compared to $81.2 million, or 25 cents a share, in the prior period.
Analysts, as surveyed by Thomson Financial, were predicting the firm to report a loss equating to 32 cents a share on revenue of $582.2 million.
Total revenue fell 7%, to $563.2 million.
In afterhours trading, the stock, which closed at $24, was unchanged. The firm had warned investors earlier this month to expect a disappointing quarter.
"The issue for us in the second quarter was ongoing weakness in the mortgage industry," the company said in a press release.
Revenue from mortgage operations fell 40.4%, to $140.6 million. H&R Block experienced lower origination volumes, reduced gain on sale margins and higher loan loss provisioning, it says.
The company had warned investors earlier this month that it was considering "strategic alternatives" for Option One, its sub-prime mortgage business, including a sale or "public market transaction." Sub-prime mortgages are high-interest loans offered to borrowers who are considered more risky.
H&R Block hopes to come to a decision early next year.
It had also lowered its earnings guidance for fiscal 2007 to reflect pricing pressure on mortgage loans and lower-than-expected originations.
Mortgages aside, tax services typically experiences an operating loss in the first and second fiscal quarter, it says. However the company was encouraged by "pre-season" tax results in November and says it is well positioned for the upcoming tax season