Intuit (Nasdaq: INTU ) , maker of tax preparation and accounting software, recorded a 19% surge in its third-quarter profits as more and more tax filers continued to shift to filing taxes online. But the revenue from its coveted TurboTax software rose less than what most analysts anticipated, resulting in a plunge in the shares the following day.
For Intuit, the second and third quarters are especially vital since most of its software is sold before the tax season. Let's take a peek at its quarterly performance to know what the company has been up to.
Despite the resulting plunge in its share price, Intuit experienced strong growth during the recent tax season as net income for the quarter rose to $688 million from $576 million in the corresponding period last year. Revenues grew by 15% to $1.85 billion from $1.61 billion in the year-ago quarter, primarily driven by its Small Business and Consumer Tax segments.
Intuit has a clear-cut edge over its competitors like H&R Block (NYSE: HRB ) in the online tax-filing market, and the shift from manual filing to online filing definitely paints a good picture for this greater trend.
Taxing business, really
Its small business segment reported 13% growth, triggered by customer acquisition in connected services and improved revenue mix. All of its three sub-segments -- financial management, employee management, and payment solutions revenue -- witnessed growth in revenue. This is yet another encouraging signal for Intuit's investors.
Intuit has also been focusing on expanding the professional accounting and tax online offerings, which boosted its accounting professionals segment's revenue by 10% on a year-on-year basis. The company's other two segments -- financial services and other business -- also experienced a revenue growth of 5% and 17%, respectively.
The Foolish bottom line
The company raised its outlook and revised its full-year guidance range considerably based on the solid overall growth in the quarter. In spite of some warts in the TurboTax business, Intuit still looks like a solid business at an appealing price. What say you, Fools?