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H&R Block beats forecasts
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February 22, 1999: 8:52 a.m. ET
Firm in merger talks as strong start to tax season helps cut losses
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NEW YORK (CNNfn) - H&R Block Inc. said Monday it is in talks on a possible merger and reported a sharply lower loss, easily beating forecasts on Wall Street.
The nation's biggest tax preparation services company said it is talking with McGladrey & Pullen, an accounting and consulting firm, about a possible merger. It gave no details, saying only there is no guarantee the talks will result in a deal.
The Kansas City, Mo.-based company said a strong start to the tax season helped it reduce losses from ongoing operations by 81 percent.
For its fiscal third quarter, ended Jan. 31, the company reported a loss of $2.8 million, or 3 cents a share, from continuing operations compared with a loss of $14.8 million, or 14 cents a share, a year earlier. Wall Street had been looking for a loss of 17 cents a share for the latest quarter, according to First Call, which tracks analysts' estimates.
Revenue jumped 46 percent to $291 million from $199 million.
"The tax season has gotten off to a strong start, which contributed to our solid results," President Frank Salizzoni said, adding that the rest of the tax season was "critical" to results.
The results exclude a loss of $20 million, or 21 cents a share, in the latest quarter from the sale of a credit card business and a gain of $232 million, or $2.18 a share, partly from its sale of CompuServe last year.
Including the discontinued operations, Block's net loss was $23.1 million, or 24 cents a share, compared with net earnings of $214.6 million, or $2.04 a share, a year earlier.
H&R Block stock rose 9/16 to 41-1/8 Friday. 
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