H&R Block Increases Sales but Misses Revenue Estimate

Just the facts, Fool.

Seth Jayson
Seth Jayson
Sep 6, 2012 at 12:00AM
Other

H&R Block (NYSE: HRB) reported earnings on Sep. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended July 31 (Q1), H&R Block missed estimates on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted significantly and GAAP loss per share shrank.

Margins improved across the board.

Revenue details
H&R Block chalked up revenue of $96.5 million. The two analysts polled by S&P Capital IQ predicted a top line of $101.2 million on the same basis. GAAP reported sales were 6.9% higher than the prior-year quarter's $90.3 million.

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 -$0.38. The five earnings estimates compiled by S&P Capital IQ averaged -$0.38 per share. GAAP EPS were -$0.39 for Q1 compared to -$0.57 per share for the prior-year quarter.

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 27.0%, 1,820 basis points better than the prior-year quarter. Operating margin was -155.8%, 5,690 basis points better than the prior-year quarter. Net margin was -111.4%, 8,250 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $130.6 million. On the bottom line, the average EPS estimate is -$0.40.

Next year's average estimate for revenue is $3.17 billion. The average EPS estimate is $1.63.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 380 members out of 563 rating the stock outperform, and 183 members rating it underperform. Among 155 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 85 give H&R Block a green thumbs-up, and 70 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 $19.33.

Can your retirement portfolio provide you with enough income to last? You'll need more than H&R Block. Learn about crafting a smarter retirement plan in "The Shocking Can't-Miss Truth About Your Retirement." Click here for instant access to this free report.