The 10-second takeaway
For the quarter ended Oct. 31 (Q2), H&R Block beat expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP loss per share dropped.
Margins grew across the board.
H&R Block tallied revenue of $137.3 million. The three analysts polled by S&P Capital IQ predicted a top line of $130.5 million on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $119.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.37. The seven earnings estimates compiled by S&P Capital IQ averaged -$0.40 per share. GAAP EPS were -$0.39 for Q2 compared to -$0.47 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 38.4%, 1,670 basis points better than the prior-year quarter. Operating margin was -103.2%, 5,540 basis points better than the prior-year quarter. Net margin was -76.7%, 4,210 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $679.7 million. On the bottom line, the average EPS estimate is $0.07.
Next year's average estimate for revenue is $2.95 billion. The average EPS estimate is $1.65.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 369 members out of 549 rating the stock outperform, and 180 members rating it underperform. Among 160 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 91 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 $20.86.
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