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



Foolish Forecast: Noodling Intuit

According to the jingle, Christmas is the "most won-der-ful time of the year." Not so for investors in Intuit (Nasdaq: INTU  ) . For these lucky souls, the most wonderful time of the year is tomorrow, when the tax-prep-software writer reports its earnings for the quarter in which everyone and his brother is buying copies of TurboTax. Intuit will report fiscal Q3 2006 numbers after the market closes.

What analysts say:

  • Buy, sell, or waffle? A full dozen analysts follow Intuit. Five each rate it a buy or a hold, and two call it a sell.
  • Revenues. Analysts are looking for 13% sales growth over last year. The target is $943.7 million.
  • Earnings. Profits are expected to come in 15% higher at $1.76 per share. (Note, however, that this is a "pro forma" (Latin for "what if") estimate. Intuit estimated its generally accepted accounting principles earnings at $1.67 or $1.68 for the quarter.)

What management says:
Intuit is one of those companies that, annoyingly, fails to file the majority of its press releases with the SEC for easy reference by investors. To keep yourself abreast of the latest news, your best bet is to bookmark the company's own investor relations page and check it from time to time. There you'll see, for instance, that on April 20, Intuit raised earnings guidance in response to a 20% increase in TurboTax units shipped. CEO Steve Bennett said that "TurboTax had a great finish to an outstanding season," adding that Internet-based tax services "delivered excellent growth." Combine that with "strong" performance from "QuickBooks and our other businesses," and Intuit felt confident in increasing its revenue and earnings guidance to, well, just about the same numbers that the analysts are parroting (see above).

What management does:
To get your earnings rising faster than your sales, you need to increase margins on those sales (i.e., get more efficient). Which is precisely what Intuit's been doing. Rolling gross, operating, and net margins today are all higher than they were 18 months ago.

Margins %




























All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Motley Fool Inside Value lead analyst Philip Durell cautions that Intuit today "faces a renewed marketing effort by Microsoft to eat into its QuickBooks small business software empire. To date, Intuit has continued to grow its franchise despite many similar attacks from Microsoft." He expects that Intuit can "maintain its market share [but] may experience margin pressures from Microsoft's willingness to discount its product price."

On the plus side, Intuit's specific mention of its Web-based tax filing business' success proves out one of Philip's reasons for recommending the company in March 2005. Back then, he observed that the company's consumer tax division was "expected to get a boost from Web-based filing [and specifically, a new product] called SnapTax [that] enables a filer to fill out an IRS form 1040A in no more than 15 minutes." Good call, Philip.


  • H&R Block (NYSE: HRB  )
  • Microsoft (Nasdaq: MSFT  )
  • Automatic Data Processing (NYSE: ADP  )
  • Paychex (Nasdaq: PAYX  )
  • BMCSoftware (NYSE: BMC  )
  • Ceridian (NYSE: CEN  )

Find investors interested in Microsoft, another Inside Value pick, when you take a free trial to the newsletter and check out its discussion board.

Fool contributor Rich Smith does not own shares of any company named above.

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: 513635, ~/Articles/ArticleHandler.aspx, 10/22/2016 3:33:09 AM

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 6 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

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

10/21/2016 4:00 PM
ADP $86.72 Down -0.12 -0.14%
Automatic Data Pro… CAPS Rating: ****
BMC.DL $0.00 Down +0.00 +0.00%
BMC Software CAPS Rating: *****
HRB $23.39 Up +0.10 +0.43%
H and R Block CAPS Rating: ***
INTU $108.45 Up +0.55 +0.51%
Intuit CAPS Rating: ****
MSFT $59.66 Up +2.41 +4.21%
Microsoft CAPS Rating: ****
PAYX $56.00 Down -0.24 -0.43%
Paychex CAPS Rating: ****