H&R Block's (HRB) Q1 Loss Flat Y/Y, Revenues Miss Estimates
Zacks Investment Research | Aug 28, 2019 09:23PM ET
H&R Block, Inc. (NYSE:HRB) incurred first-quarter fiscal 2020 loss per share from continuing operations of 72 cents, lower than the Zacks Consensus Estimate of loss of 76 cents.
Loss was flat year over year as increase in pre-tax loss and lower shares outstanding offset increased tax benefit due to favorable discrete items. The company usually incurs loss in the first three quarters of fiscal year due to the seasonality of its tax business.
We observe that shares of H&R Block have gained 5.9% year to date, underperforming the 13% rally of the Zacks S&P 500 composite.
Revenues
Revenues of $150.4 million surpassed the consensus estimate by $1.8 million and increased 3.6% year over year. The improvement was driven by contribution from Wave Financial acquisition, improved tax return volumes in both U.S. Assisted and DIY, and increased international tax preparation fees.
Expenses
Total operating expenses were $345.5 million, up 5.6% year over year. The increase was due to technology and Wave Financial related investments partially offset by lower depreciation and amortization expense.
Financial Position
H&R Block exited the quarter with cash and cash equivalents of $607.7 million compared with $1.6 billion at the end of the prior quarter. Long-term debt was $1.5 billion, flat with the prior quarter figure. The company used $483.8 million of cash in operating activities and capex was $15.2 million.
The company paid out dividends of $52.5 million in the quarter. A cash dividend of 26 cents per share is payable Oct 1, 2019 to shareholders of record on Sep 13, 2019. H&R Block repurchased and retired around 1.6 million shares at an aggregate price of $44.1 million.
Outlook
The company reaffirmed its fiscal 2020 outlook. It continues to expect total revenue growth of 1.5% to 3.5%. EBITDA margin is expected between 24% and 26%. Effective tax rate is anticipated to be 23-25%.
Zacks Rank and Stocks to Consider
H&R Block currently carries a Zacks Rank #3 (Hold). You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.