Tax preparation company H&R Block reported a net loss that fell below analyst expectations.
In after-hours trading, H&R Block (HRB) stock was off nearly 3.3%, or 52 cents, to $15.35. Shares fell into the close Wednesday, down 0.75%, or 12 cents, to $15.87.
The company reported a net loss from continuing operations of $3.6 million, or 1 cent per share, compared to a loss of $11 million, or 4 cents per share, in the prior year period. H&R was expected to produce a profit of 5 cents per share despite a decline in revenue for its fiscal third quarter. Total revenues fell 2.5% to $663.3 million.
Due to the seasonality of tax preparation, the company typically reports an operating loss for the first nine months of the fiscal year. Tax preparation and related revenue through Jan. 31 increased 10%, or $48.5 million, due to growth in total tax returns prepared, but revenue from financial products declined.
As the Wall Street Journal pointed out Wednesday, regulatory crackdowns on refund anticipation checks curbed that business in recent years. While H&R was able to attract customers with such refunds in the latest quarter, they were deposited on H&R MasterCards, reducing revenue.
H&R Block’s discontinued operations include Sand Canyon, formerly Option One Mortgage, which continues to receive claims for “alleged breaches of representations and warranties” that totaled $35 million in the quarter.
The quarterly dividend remains intact, for a yield of about 4.9%.
