Updated from Aug. 19
better-than-expectedfourth-quarter earnings and reiteration of guidance for fiscal year 2004 boosted shares nearly 4%in heavy trading Wednesday.
Shares of Intuit climbed by as much as $1.63, or3.6%, before falling slightly to $46.52, still up$1.28, or 2.8%.
On Tuesday, Intuit beat Wall Street earningsestimates by 2 pennies on stronger-than-expectedrevenue driven by QuickBooks and acquisitions. Thecompany offered first-quarter guidance short ofexpectations, but because the Intuit's business is soseasonal, investors appeared to pay closer attentionto the company's decision to reaffirm prior guidancefor fiscal year 2004.
"As we see it, the weak implied revenue growth of6% to 10% in 1Q04 is not very meaningful since thequarter accounts for just 12% of full-year revenue andalso embeds a low contribution from Intuit's highergrowth business that are concentrated in 2Q and 3Q,"Jefferies analyst Craig Peckham wrote in a noteWednesday. "We recommend using any weakness in theshare price on this guidance 'disappointment' as anopportunity to add positions since the more importantfull-year guidance is unchanged and still favorable inour opinion." Peckham has a buy rating on Intuit andhis firm hasn't done any banking business with the company.
The Mountain View, Calif.-based maker of financial software, including TurboTax, posted a GAAP loss of $24.7 million, or 12 cents a share, in the fourth quarter, which ended in July. That compared with a net loss of $31.8 million, or 15 cents a share, in the same period a year earlier.
Excluding gains and losses on investments anddiscontinued businesses, Intuit's pro forma loss camein at $10.7 million, or 5 cents a share, in the fourthquarter, compared with a pro forma net loss of $25.8million, or 12 cents a share, a year earlier. Thatbeat Wall Street estimates of a pro forma net loss of7 cents a share, according to Thomson First Call.
Revenue rose 31% to $245.1 million from a yearearlier, also coming in slightly higher than theconsensus estimate of $244.5 million.
The company's guidance called for a GAAP loss of10 cents to 13 cents a share and a pro forma loss of 6cents to 9 cents a share on revenue of $240 million to$250 million.
Intuit, also known for its Quicken personalfinance software, typically reports a loss in thefourth and first quarters, when revenue from its taxbusiness is minimal but operating expenses to developnew products and services remain at a consistentlevel. The company generates the bulk of its revenueand profit in the second and third quarters, which endin January and April.
For the full year, Intuit reported net incomeunder generally accepted accounting principles of $343million, or $1.63 a share, up significantly from$140.2 million, or 64 cents a share, a year earlier.Last year's GAAP results included acquisition-relatedcharges of $181.4 million; this year's resultsbenefited from a $71.0 million after-tax gain on thesale of its Japanese subsidiary.
Pro forma income for the year totaled $293.8million, up 46% from fiscal year 2002. On a per-sharebasis, pro forma net income climbed 51% to $1.39 infiscal year 2003. Revenue in fiscal year 2003 climbed26% to $1.65 billion.
The company expected earnings per share of $1.36to $1.39 on revenue of $1.65 billion to $1.66 billionfor its fiscal year ending July 31. Analysts wereexpecting earnings of $1.37 a share on $1.65 billionin revenue for the full year.
Intuit expects first-quarter revenue to range from$225 million and $235 million, or year-over-yeargrowth of 6% to 10%. That's short of the consensusestimate of $244.8 million in revenue for the firstquarter. The company expects a pro forma net loss of26 cents to 30 cents a share -- higher than the22-cent consensus estimate for the first quarter. Thecompany forecast a GAAP net loss of 29 to 33 cents ashare.
David Farina, an analyst with William Blair & Co.,said he had no concerns about the company'sfirst-quarter guidance falling short of Wall Streetestimates because its business is so seasonal and itreaffirmed guidance for the full year.
"The seasonally slow quarters are irrelevantanyway," Farina said. "The only action happens aroundtax season." He has an outperform rating on Intuit andhis firm has done banking business with Intuit.
For fiscal year 2004, which began this month,Intuit reaffirmed its forecast for pro forma earningsof $1.57 to $1.67 a share on revenue of $1.85 billionto $1.95 billion. The consensus estimate is forrevenue of $1.88 billion and pro forma earnings of$1.62 for the full year.
"Intuit is committed to meeting annual growthtargets," CFO Brad Henske said on a post-closeconference call. The company will stay focused ondelivering results for the year regardless of quarter-to-quarter fluctuations, he added.
Intuit expects QuickBooks, its small businessservices and its verticals segments to each growbetween 15% to 25%; TurboTax to grow 10% to 20%; and professional accounting services to grow 7% to 12%.
In the fiscal year 2003, QuickBooks revenue was up24% to $242.8 million; Intuit's Vertical BusinessManagement Solutions was up 5% to $94.8; the company's small-business products and services revenue climbed 35% to $454.9 million; and TurboTax revenue jumped 20% to $422.9 million.
Intuit also reported Tuesday that its boardauthorized the company's third stock repurchaseprogram for up to $500 million in addition to theapproximately $110 million that remained in Intuit'sexisting program at the end of fiscal 2003.