H&R Block Beats Analyst Estimates on EPS

H&R Block (NYSE: HRB  ) reported earnings on June 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 30 (Q4), H&R Block met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP earnings per share shrank.

Margins shrank across the board.

Revenue details
H&R Block chalked up revenue of $2.00 billion. The three analysts polled by S&P Capital IQ foresaw sales of $2.01 billion on the same basis. GAAP reported sales were 1.4% lower than the prior-year quarter's $1.99 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $2.18. The five earnings estimates compiled by S&P Capital IQ forecast $2.02 per share. GAAP EPS of $1.99 for Q4 were 7.4% lower than the prior-year quarter's $2.15 per share. (The prior-year quarter included $0.05 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 68.2%, 300 basis points worse than the prior-year quarter. Operating margin was 49.3%, 290 basis points worse than the prior-year quarter. Net margin was 29.9%, 320 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $158.1 million. On the bottom line, the average EPS estimate is -$0.38.

Next year's average estimate for revenue is $3.27 billion. The average EPS estimate is $1.61.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 372 members out of 556 rating the stock outperform, and 184 members rating it underperform. Among 157 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 88 give H&R Block a green thumbs-up, and 69 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on H&R Block is outperform, with an average price target of $18.00.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On June 29, 2012, at 1:32 PM, tmorris2499 wrote:

    I question the premise of your headline. It implies an improving performance by the company when in fact H&R Block did not do as well as it did in the prior year. I don't see the $2.18 EPS in the company press release. They report basic EPS of $2.00 and diluted EPS of $1.99. Both of those numbers are less than the EPS for 2011.

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