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What: Shares of H&R Block (NYSE:HRB) were up about 12% as of 1:30 p.m. ET on Friday after the company announced better-than-expected earnings.

So what: H&R Block announced it earned $701 million, or $3.16 per share, in its fiscal fourth quarter, which ended April 30, beating the consensus estimate by $0.01 per share. The company also announced that it would increase its dividend by 10% to $0.22 per share, paid quarterly, up from $0.20.

H&R Block has been challenged by a consumer shift toward do-it-yourself tax solutions like Intuit's TurboTax. Its latest fiscal year offered little reprieve, as the company prepared 23.2 million tax returns, down 4.1% from the 24.2 million tax returns it prepared in 2015. Average price increases of 3% helped H&R Block paper over some of the loss in volume.

Now what: H&R Block executives spoke candidly about the company's performance for the quarter and full fiscal year. The company saw its DIY business lose about 2.6% of its tax volume, due to a one-percentage point loss in market share. In his prepared remarks, H&R Block CEO William Cobb said that TurboTax's Absolute Zero promotion "won the tax season and likely took share from all major branded competitors."

Looking forward to fiscal 2017, he added that the company would implement programs to drive new client growth, spend less on marketing, and reduce headcount, a strategy Wall Street is clearly buying into.

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