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Q1 Results
The Kansas City, Missouri-based company's first-quarter net loss was $133.6 million, compared to a loss of $132.7 million in the prior-year quarter. However, loss per share narrowed to $0.40 from $0.41 incurred a year earlier.
Net loss from continuing operations widened to $130.6 million from $128.4 million in the same quarter of last year. On a per share basis, loss remained at $0.39, unchanged from last year.
On average, 8 analysts polled by Thomson Reuters expected the company to post a loss of $0.37 per share. Analysts' estimates typically exclude special items.
Quarterly revenues advanced to $275.5 million from the previous year's revenue of $271.9 million. Five Wall Street analysts had a consensus revenue estimate of $280.05 million for the quarter.
Russ Smyth, president and chief executive officer of H&R Block, said, "First quarter results were in-line with our expectations and reflected our continuing success in driving out non-value added costs while making the necessary investments to ensure our success in fiscal 2010 and beyond."
In addition, the company said it is focused on efforts to enhance its field-level performance and marketing effectiveness to improve client attraction, retention and satisfaction.
Segmental Analysis
The company's Tax Services revenue grew 7.7% to $87.9 million from $81.7 million reported a year ago. Tax preparation fees increased 14.2%, primarily due to favorable results in the company's Australian tax operations.
The segment incurred a pretax loss of $172.0 million, compared to a loss of $163.7 million in the previous year, mainly reflecting a net impact of $7.4 million due to the Southwest franchise acquisition that occurred in the prior year, $3.5 million of severance expense, and $2.9 million of incremental expenses for information technology projects to prepare for the upcoming tax season. Expense increases were partially offset by savings achieved through closing underperforming retail office locations and renegotiating leases.
First-quarter segment revenues from Business Services totaled $177.6 million, up 1.7% from the prior-year's revenue of $174.7 million. Core revenues, primarily tax and consulting, increased 5.8% over last year, offset in part by a decline in capital markets revenues.
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