Image source: H&R Block.

What: Shares of H&R Block (NYSE:HRB) are trading lower by about 16% as of 2:55 p.m. ET after the company announced disappointing fiscal third-quarter earnings.

So what: The tax preparation company reported a net loss of $79 million in the fiscal third quarter, or a loss of $0.34 per share. The consensus analyst estimate called for a net loss of $0.24 per share.

The story is all at the top line, where H&R Block has struggled for several years. The business generated revenue of $475 million for the fiscal quarter compared to $509 million during the same period last year. The company noted that the decline was due "primarily to lower tax preparation volumes" and the impact of its sale of H&R Block Bank to BofI Holding.

Now what: Having gotten rid of the bank, H&R Block is allocating more capital to share repurchases. The company announced that it repurchased and retired 12 million shares in the most recent quarter, bringing its repurchases under its authorization to $1.9 billion, or 19% of its shares outstanding. 

The market is less than impressed by a strategy that involves fixing a shrinking underlying business by shrinking the share count, however.

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