The shares were up 5.1% at US$21.90 after the company’s fiscal third quarter figures proved to be not as bad as expected.
Revenues and earnings for the three months to the end of January were affected by the delayed tax season, the company noted.
Revenue eased to US$452mln from US$475mln in the same period a year earlier, while underlying losses, or LBITDA, remained practically flat at US$79mln.
The decline in revenue was primarily due to lower client volumes in the Assisted and DIY tax preparation businesses resulting from the delay in the overall tax season, coupled with the pricing impact of some early season promotions.
The loss per share widened to 49 cents from a loss of 34 cents a share a year earlier, which the tax return preparation specialist put down (ironically) to its effective tax rate and a reduction in the number of shares in issue.
The market had been expecting a slightly deeper loss of 50 cents a share.
“We are starting to fully realize the benefits of last year’s cost reduction efforts,” said Tony Bowen, H&R Block’s chief financial officer.
“These savings have enabled us to invest in other areas of the business, including our early season promotions and our new DIY pricing structure, which have been instrumental in achieving new client growth and taking market share in the first half of this season,” he added.
Bill Cobb, H&R Block’s president and chief executive officer, said the results were in line with management’s expectations for the first half of the season.
“With our new partner, IBM Watson, we are focused on continued execution of our reinvented client experience over the remainder of the tax season,” Cobb said.
Story by ProactiveInvestors