H&R Block posts smaller 1Q loss as costs decline
KANSAS CITY, Mo. (AP) — H&R Block on Wednesday said its fiscal first-quarter loss narrowed by 39 percent, as the nation's largest tax preparer cut its spending.
Kansas City-based Block stemmed its loss through cost-cutting plans. Its year-ago results also included large charges related to its sale of its former business consulting unit, RSM McGladrey, and a litigation charge.
H&R Block usually reports a loss in its first quarter, when revenue drops after tax season ends.
The company lost $107.4 million, or 39 cents per share in the quarter ended July 31. That compared with a loss of $175.1 million, or 57 cents per share, in the same period last year.
Excluding a penny-per-share charge for certain tax items, it lost 38 cents per share in the most recent quarter.
The per-share results in the recent quarter got a boost from a 9 percent reduction in the number of outstanding shares because of company repurchases.
Revenue slipped 4 percent, to $96.5 million, from $100.6 million last year. Block reported a decrease in interest income from its mortgage loan portfolio, and its results a year ago were helped by an extension of the tax filing season in Canada.
Analysts, on average, were expecting a loss of 37 cents per share, according to FactSet. Analyst estimates typically exclude one-time charges and gains.
Wall Street expected $101.2 million in revenue, on average.
In the first quarter of fiscal 2011, Block took a non-cash charge of $89.7 million related to the RSM McGladrey sale, and reported $15 million litigation costs.
Through restructuring measures, the company cut its spending on compensation and benefits and occupancy and equipment, and said it expects to save between $85 million and $100 million from the cost reductions in the current fiscal year.
H&R Block Inc. shares declined 27 cents to end Wednesday's session at $16.23. The stock gained 9 cents in aftermarket trading.