Updated from Feb. 18

Intuit

(INTU) - Get Report

on Wednesday posted a 16% jump in second-quarter earnings and a 14% increase in revenue, surpassing analyst estimates.

Although Intuit also raised its earnings targets for the year, the accounting and tax software maker said results in the all-important third quarter will fall short of current analyst estimates.

Shares of Intuit dropped $2.60, or 5.3%, to $46.59 in recent trading Thursday morning.

Under generally accepted accounting principles, Mountain View, Calif.-based Intuit reported net income of $149.1 million, or 73 cents a share, in the second quarter, which ended Jan. 31. That compared with net income of $128.4 million, or 60 cents a share, in the same period a year earlier.

Excluding charges, Intuit earned pro forma net income of $155.7 million, or 77 cents a share, compared with pro forma net income of $128.8 million, or 61 cents a share, a year earlier. Revenue rose 14% from a year earlier to $636.3 million.

Wall Street analysts expected Intuit to earn pro forma net income of 70 cents a share on $633.9 million in revenue, according to Thomson First Call. Intuit's second-quarter earnings also exceeded the company's own guidance, although revenue fell within the company's targets, which set a range of $615 million to $640 million.

Intuit, best known for its Turbo Tax and Quicken software, generates the bulk of its revenue and profit in its second and third quarters. The company typically reports a loss in the first and fourth quarters.

Intuit expects revenue in its third quarter, the company's strongest period because of tax season, to range from $685 million to $725 million, representing a year-over-year increase of 8% to 14%. Third-quarter pro forma earnings are expected to range from $1.12 to $1.16 a share.

Analyst had targeted third-quarter pro forma earnings of $1.23 a share on $736.9 million in revenue.

For the full year, Intuit raised pro forma earnings guidance by 3 cents a share and reaffirmed revenue guidance, which puts sales between $1.85 billion and $1.95 billion. Pro forma earnings should reach $1.60 to $1.70 a share, while GAAP earnings are expected to be $1.48 to $1.58 a share. The latest analyst estimates called for fiscal 2004 pro forma earnings of $1.64 a share on $1.9 billion in revenue.