Mortgage Swoon Slams H&R

Now the tax preparer wants to sell its mortgage business.
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H&R Block (HRB) - Get Report slashed full-year earnings guidance and hired Goldman Sachs to shop its Option One Mortgage unit.

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.