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H&R Block 2Q loss widens
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November 23, 1999: 9:16 a.m. ET
Tax preparer posts operating loss of 46 cents a share, better than estimates
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NEW YORK (CNNfn) - Tax preparer H&R Block Tuesday unveiled a wider fiscal second-quarter operating loss from a year ago, although it was better than analysts had forecast.
The Kansas City, Mo.-based company recorded a loss from continuing operations of $44.7 million for the quarter ended Oct. 31, or 46 cents per diluted share, compared with $31.2 million, or 31 cents a share, a year earlier. Analysts polled by First Call Corp. had expected a loss of 47 cents a share.
Also, revenue more than doubled, climbing to $209.9 million from $85.6 million.
Higher expenses from U.S. tax operations and a decline in investment income were the two main factors behind the company's higher net loss during the quarter, said chief executive Frank Salizzoni.
Nevertheless, strong revenues from its Option One Mortgage Corp. stake helped offset some of those additional expenses, Salizzoni said.
The loss of investment income due to the
company's share repurchase program and the resulting fewer shares outstanding also affected the final operating loss for the quarter, boosting the loss per share by approximately 4 cents, Salizzoni said.
H&R Block Inc. (HRB) rarely reports income outside its fiscal fourth quarter which ends in April -- when most of its customers file their tax returns. Still, the company has been purchasing businesses that can generate income during all four quarters to alleviate that issue. On Sept. 1, H&R Block agreed to purchase Olde Financial Corp. for $850 million in cash to add asset management and a securities brokerage to its repertoire.
For its first six months, H&R Block posted a loss from continued operations of $81.8 million, or 84 cents a share, compared with $57.7 million, or 57 cents a share, in the same period last year. The net loss including discontinued operations for the six months ended Oct. 31, 1998, was $58.9 million, or 58 cents a share.
H&R Block's board of directors also declared a regular quarterly cash dividend of 0.275 a share payable Jan. 3, 2000, to shareholders of record on Dec. 13, 1999.
H&R Block shares ended the day on Monday down 1-1/8 at 46-1/16. H&R Block is the world's largest tax preparation company.
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H&R Block
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