The 10-second takeaway
For the quarter ended April 30 (Q4), H&R Block missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share expanded significantly. GAAP earnings per share expanded significantly.
Margins grew across the board.
H&R Block tallied revenue of $2.20 billion. The five analysts polled by S&P Capital IQ anticipated a top line of $2.29 billion on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $1.96 billion.
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 $2.54. The nine earnings estimates compiled by S&P Capital IQ predicted $2.60 per share. Non-GAAP EPS of $2.54 for Q4 were 23% higher than the prior-year quarter's $2.06 per share. (The prior-year quarter included -$0.02 per share in earnings from discontinued operations.) GAAP EPS of $2.42 for Q4 were 22% higher than the prior-year quarter's $1.99 per share. (The prior-year quarter included -$0.02 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 70.9%, 100 basis points better than the prior-year quarter. Operating margin was 51.9%, 90 basis points better than the prior-year quarter. Net margin was 30.2%, 30 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $99.3 million. On the bottom line, the average EPS estimate is -$0.38.
Next year's average estimate for revenue is $3.09 billion. The average EPS estimate is $1.87.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 354 members out of 539 rating the stock outperform, and 185 members rating it underperform. Among 144 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 93 give H&R Block a green thumbs-up, and 51 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 $28.33.
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