Sales Climb at Intuit

But the company lowers full-year estimates.
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(INTU) - Get Report

sales surged 14% in its seasonally strong third quarter, but the company lowered its full-year profit estimates due to tax liabilities from the sale of one of its businesses.

The Mountain View, Calif.-based vendor of tax preparation software said revenue for the three months ended April 30 was $952.6 million, compared with $834.8 million at the same time last year.

Sales surpassed the average analyst expectation, which called for Intuit to record $943.6 million in sales.

The company posted net income of $298.6 million, or $1.68 a share. Intuit had $300.5 million, or EPS of $1.61 a share, in the year-ago period.

Excluding stock-compensation expenses and certain other items, Intuit said it earned $1.79 a share in the fiscal third quarter. Analysts polled by Thomson First Call were looking for Intuit to earn $1.76 a share.

"The consumer tax business had a record season, with great execution across the board, and our QuickBooks businesses continued to perform well," said CEO Steve Bennett in a statement accompanying the release. "We're on track to deliver another year of double-digit revenue growth."

Intuit's consumer tax-products revenue rose 19% year over year to $499 million in the third quarter, while QuickBooks revenue rose 8% to $212 million.

Shares of Intuit slid 0.5%, or 27 cents, to $51 in extended trading.

The company said it anticipates a wider-than-expected loss in its current quarter due to tax liabilities arising from the sale of its MasterBuilder business. Intuit now expects to record a loss of 24 cents to 22 cents a share in its fiscal fourth quarter, vs. its previous expectation of a loss of 15 cents to 17 cents a share.

This will take a toll on full-year results, lowering EPS to between $2.20 and $2.22 instead of the company's prior range of $2.26 to $2.29.

Revenue for the full year will be higher than initial expectations, however. Intuit said fiscal 2006 sales will range between $2.31 billion and $2.33 billion, up from its earlier guidance of $2.295 billion and $2.315 billion.

The company also announced a 2-for-1 stock split payable July 6, as well as a plan to repurchase $500 million in shares over the next three years.