Intuit Inc., a provider of tax and personal-finance software, tumbled the most in a decade after a decline in Internal Revenue Service returns received in the recent tax season prompted it to cut sales and profit forecasts.
The stock fell 11 percent to $57.09 at the close in New York, the biggest one-day decline since March 2003. At least three analysts reduced their ratings for the Mountain View, California-based company.
Intuit, which makes QuickBooks and TurboTax software used by consumers to file taxes, said it expects sales of the latter product to increase 4 percent in fiscal 2013 after IRS returns received through April 12 fell 2 percent from a year earlier. The company previously forecast as much as 10 percent annual sales growth for the consumer tax business, which generates about 45 percent of Intuit’s operating income, according to Wayne Johnson, an analyst at Raymond James & Associates Inc.
“Any slowdown in that highly profitable business will slow profitability growth for the rest of the company,” Johnson wrote in a report today. The Atlanta-based analyst cut his rating on Intuit stock to market perform, the equivalent of a hold, from outperform.
Intuit reduced its forecast for net income in the fiscal third quarter -- when the company brings in about half its annual revenue -- to $2.79 to $2.81 a share, from a prior projection for as much as $2.88 a share, according to a statement issued yesterday after the close of regular trading.
Sales in the period, which ends April 30, will be $2.17 billion to $2.18 billion, compared with an earlier forecast for as much as $2.28 billion. Analysts on average had estimated revenue would be $2.25 billion.
Revenue for the year ending on July 31 will be $4.5 billion to $4.52 billion, compared with a prior forecast of $4.55 billion to $4.65 billion, Intuit said. Analysts had been predicting $4.59 billion on average.
“This was a tough tax season overall,” Chief Executive Officer Brad Smith said in the statement.
Today’s drop wiped out Intuit’s gains for the past year, leaving the shares little changed. By comparison, the Standard & Poor’s 500 Index has gained 14 percent in 12 months.