Profit Climbs at Intuit

The company will shed its unit that makes Track It! software.
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(INTU) - Get Report

third-quarter profit rose on revenue growth of 20%, as the company reaffirmed fourth-quarter guidance excluding results from a unit it plans to sell.

The company said after the bell Wednesday that third-quarter net income rose to $300.5 million, or $1.61 a share, from $264 million, or $1.33 a share, a year earlier.

Excluding items in both quarters, profit rose to $289.9 million, or $1.55 a share, from $239.9 million, or $1.20 a share. On this basis, the company met analysts' earnings expectations of $1.55 a share.

Revenue rose to $849.5 million from $709.8 million. The Wall Street consensus for the latest quarter was $843.3 million.

Intuit also announced that it has decided to sell its Information Technology Solutions business, which sells Track-It! software.

"The market for our ITS business has changed," said Steve Bennett, Intuit's president and chief executive officer. "As a result, ITS would require much greater focus and additional investments to be accretive to Intuit's revenue growth rate in the future. We've identified better investment opportunities in our core businesses."

The unit has contributed $42.3 million in revenue in the first three quarters of fiscal 2005 and 5 cents in earnings per share.

Excluding any contribution from this unit, Intuit said its guidance for the fourth quarter and full year remains unchanged; expecting a fourth-quarter loss before items of 9 cents to 12 cents a share on revenue of $270 million to $285 million.

For the full year, the company expects earnings before items of $1.96 to $1.99 a share on revenue of $2.01 billion to $2.02 billion.

Intuit also said its board has authorized a three-year stock repurchase program for up to $500 million.

The company's shares slipped 2.7% in after-hours trading to $43.05.