KANSAS CITY, Mo. ( TheStreet) -- H&R Block ( HRB) posted weaker-than-expected quarterly financial results after the closing bell Tuesday. Investors voiced their disappointment, bidding H&R Block shares 0.4% lower in after-hours trading. During intraday trading the stock rose 4.1%, or 53 cents, to close at $13.55. H&R Block narrowed its fiscal second quarter net losses to $109 million, or 36 cents loss per share, from a loss of $128.6 million, or 38 cents loss per share, in the year-earlier period. The tax preparation service said it "typically reports a second quarter operating loss due to the seasonality of its business." Total revenue fell 1% to $322.9 million, from $326.1 million. Analysts' consensus call had been for revenue of $339.5 million. "Our second quarter results met our expectations and we are aggressively preparing for the key second half of our fiscal year," said CEO Alan Bennett. "Reversing our early-season client losses is our top priority and we will take strong actions to drive more traffic into our offices." Tax services revenue grew 1.5% year-over-year to $110.9 million. H&R Block's RSM McGladrey business saw revenues fall 1.5% year-over-year to $203.4 million. The company repurchased and retired 3.5 million shares in the recent quarter at a cost of $44.3 million. H&R Block maintained its previously announced quarterly cash dividend of 15 cents per share, to be paid next on Jan. 3 to shareholders of record on Dec. 13.
Oppenheimer analyst Scott Schneeberger downgraded H&R Block's stock to perform, from outperform, in September, citing a mortgage put-back overhang that carries potential headline risk for the tax preparer. The analyst also said the downgrade had to do with a lower fiscal 2011 earnings outlook on "significant" reinvestment of previously modeled cost cuts. >> H&R Block Downgraded on Headline Risk Schneeberger noted at the time that "HRB had traded off this week on elevated volume on mortgage putback concerns," adding that "it recouped the week's losses on management addressing these concerns by providing incremental points of data." H&R Block shares have been under greater pressure since the Treasury Department announced its new pilot program to give prepaid cards to Americans without bank accounts in order to receive their tax refunds. Schneeberger noted that Bennett increased the adoption of H&R Block's Emerald Card, a prepaid credit card it sells to customers who don't have bank accounts, as reported in
H&R Block's first-fiscal quarterly report . Bennett said H&R Block would work to improve customer service in an effort to reduce the number of customers who walk out during a tax preparation session. H&R Block competitors Intuit ( INTU), maker of TurboTax, and Jackson Hewitt Tax Service ( JTX) were mixed Tuesday. Intuit shares ticked lower by 0.1% while Jackson Hewitt added 1.3%. Intuit is a member of the Business Software Alliance, which said this fall it spent $480,000 in the second quarter to lobby the federal government on cybersecurity policy, data privacy legislation and tax issues. The BSA spent $380,000 lobbying in the first quarter, and $400,000 in the second quarter of 2009. -- Written by Miriam Marcus Reimer in New York. >To contact the writer of this article, click here: Miriam Reimer. >To follow the writer on Twitter, go to http://twitter.com/miriamsmarket. >To submit a news tip, send an email to: firstname.lastname@example.org.