H&R Block 3Q loss widens
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February 23, 2000: 7:57 a.m. ET
Largest U.S. tax preparer suffers from new investments but still beats Street
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NEW YORK (CNNfn) - A quick start to the 2000 tax season wasn't enough to keep H&R Block Inc.'s fiscal third-quarter loss from slipping slightly, but it did help the nation's largest tax preparer beat analysts' expectations by a dime.
The Kansas City-based company posted a loss from continuing operations of $7.1 million, or 7 cents per share, for the period ended Jan. 31.
That was wider than the $2.8 million, or 3 cents per share, H&R Block (HRB: Research, Estimates) lost during the comparable period last year, but easily beat the consensus analyst estimate, as compiled by First Call Corp., which projected a 17 cents per share loss. The company's year-ago quarter excludes more than $20 million in net losses from discontinued operations.
Aided by a surge in early-season tax preparation business and the inclusion of two recently acquired businesses, the company's revenue jumped nearly 76 percent for the quarter to a record $512.5 million.
The company's quarterly loss was due almost entirely to new investments and increased expenses in the company's core tax preparation businesses, as well as start-up costs for new business initiatives designed to generate e-commerce sales.
Through the first month of tax filing season, H&R Block said 92 percent of its returns were filed electronically. However, the company was forced to shut down its electronic filing system last week after technical glitches that mixed some clients' files with others were uncovered.
The financial performance of H&R Block's other business units was more solid. The company's financial services unit posted a nearly 82 percent increase in pre-tax earnings on a 130 percent jump in revenue, primarily due to the acquisition of Olde Financial Corp.
Through the first nine months of its fiscal year, H&R Block lost $88.9 million from continuing operations, or 91 cents per share, compared with a net loss of $60.5 million, or 60 cents, a year earlier.
H&R Block shares inched up 1/16 to 40-7/16 in trading Tuesday.
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H&R Block
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