The Kansas City, Mo., financial services outfit cited continued pricing pressures in the mortgage market as well as lower-than-expected originations. H&R Block said Option One will close 12 branch offices in the next four months in a bid to bring capacity in line with volume.
The company said it expects to make between $1.20 and $1.45 a share for the year ending April 30, down from the previous $1.60-$1.85-a-share forecast. Analysts surveyed by Thomson Financial were looking for $1.56.
"Option One has generated an outstanding record of growth and profitability during H&R Block's ownership while achieving one of the most efficient cost structures in the industry," said CEO Mark Ernst. "As a result, it has been difficult to consider other possibilities for this business, but a potential separation of Option One would enable H&R Block to further focus management resources on its core businesses and create long-term shareholder value."
Shares were halted late Monday.