Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



H&R Block Earnings Face a Tough Off-Season

H&R Block (NYSE: HRB  ) will¬†release its quarterly report next Tuesday, and investors have generally liked the company's prospects, sending shares to all-time record-high levels before falling back somewhat in just the past month. Yet given the company's seasonal business, expecting H&R Block earnings to look good in its off-season quarters isn't realistic, and the real goal is just to minimize the pain until next year's tax season rolls around again.

Obviously, a company that handles tax preparation will do most of its business when tax returns are due. Although H&R Block theoretically could have work to do for businesses and others needing help on a quarterly basis, it primarily gets most of its revenue from traditional personal income tax returns and software, for which demand primarily comes in the month of April. With those hard truths in mind, let's take an early look at what's been happening with H&R Block over the past quarter and what we're likely to see in its report.

Stats on H&R Block

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$98.40 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

How well will H&R Block earnings hold up this quarter?
In recent months, analysts have had mixed views on H&R Block's earnings prospects, narrowing their loss estimates for the July quarter by $0.03 per share but cutting their views on full-year fiscal 2014 and 2015 earnings. The stock has taken the more negative view, falling more than 4% since late May.

H&R Block's April-quarter results showed the same level of uncertainty for the company. On one hand, cost-cutting efforts paid off for the company's bottom line, with a rise in earnings-per-share from continuing operations of $0.25. Yet the number of tax-filings H&R Block helped with fell by 2.7%.

The longer-term threat to H&R Block comes from a broader set of alternatives for tax preparation. Rival Intuit (NASDAQ: INTU  ) and its TurboTax software is an industry leader, but both companies reported weaker-than-expected return-processing figures this year. Up-and-coming TaxACT software-provider Blucora (NASDAQ: BCOR  ) has also made a splash in the industry, picking up double-digit market share and putting itself in position to challenge H&R Block's own tax software. With a greater number of free e-filing vehicles available to millions of taxpayers, the need to visit an H&R Block specialist or to use its own proprietary tax software to gain access to the speedier refunds available from e-filed returns has diminished greatly.

Still, H&R Block has one thing in its favor: tax laws are getting more complicated. With Obamacare introducing new complexities that many taxpayers aren't even aware of, tax preparers are likely to have a lot more business come next tax season. It'll be up to H&R Block to make sure it reaps as much of that new business as possible, even as Intuit, Blucora, and locally based tax accountants seek to claim their fair share as well.

In the H&R Block earnings report, see how well the company is able to continue its cost-cutting initiatives in order to minimize losses during the off-season. By cutting expenses to the bone during its off-season, H&R Block will be in a better position to make a strong push against its competitors in the new year.

H&R Block wants to do your taxes for you, but with the right planning, you can take steps to take control of your own taxes and potentially even lower your tax bill. In our brand-new special report "How You Can Fight Back Against Higher Taxes," the Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here to get your copy today -- it's absolutely free.

Click here to add H&R Block to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2615845, ~/Articles/ArticleHandler.aspx, 9/28/2016 1:26:05 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,201.87 -26.43 -0.14%
S&P 500 2,155.01 -4.92 -0.23%
NASD 5,293.98 -11.73 -0.22%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 1:10 PM
HRB $22.76 Up +0.01 +0.04%
H and R Block CAPS Rating: ***
BCOR $11.06 Up +0.06 +0.50%
Blucora CAPS Rating: **
INTU $109.95 Down -0.16 -0.15%
Intuit CAPS Rating: ****