Intuit’s Online Subscribers Rise as Users Shift to Web

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Intuit Inc.’s number of online subscribers to two key software products rose in the fiscal second quarter, as the company shrugged off the effects of setbacks related to its TurboTax software.

Subscribers to Intuit’s QuickBooks Online accounting software jumped 50 percent in the quarter ended Jan. 31, faster than the 43 percent increase in the prior period, Mountain View, California-based Intuit said in a statement Thursday. Subscribers to TurboTax Online tax software rose 19 percent, the company said.

In total, Intuit posted a second-quarter loss excluding some items of 6 cents a share on revenue of $808 million. The loss was narrower than the 13-cent loss estimated on average by analysts, with sales topping the projection of $786.9 million, according to data compiled by Bloomberg.

“These are strong results,” said Gil Luria, an analyst at Wedbush Securities Inc., who has the equivalent of a hold rating on the stock. “They were able to get better volume growth without sacrificing price or spending more on marketing.”

Intuit shares rose in extended trading after closing at $91.11 in New York. The stock is down 1.2 percent this year, compared with a 1.9 percent gain in the Standard & Poor’s 500 Index.

The company posted a second-quarter net loss of $66 million, wider than the $37 million loss from a year ago.

TurboTax Troubles

Intuit recently grappled with issues related to TurboTax, one of its main products. Earlier this month, Intuit scrambled to restore consumer trust in the tax software after states saw a spike in the number of fraudulent returns being filed via TurboTax. Customers also complained last month after the company increased the prices for some features of TurboTax.

The snafus contributed to a 7 percent decline during the quarter to desktop customers of TurboTax, Chief Executive Officer Brad Smith said on a conference call. Half of the decline came from the “self-inflicted wound” of the pricing change, he said.

Still, sales from the consumer tax division, which includes TurboTax, rose 54 percent from a year ago, as this tax season started earlier than usual, he said.

For the fiscal third quarter, sales will be $2.075 billion to $2.15 billion, with profit excluding items of $2.70 to $2.75 a share, the company said. That missed analysts’ average estimates of sales of $2.22 billion and profit of $2.87 a share, according to data compiled by Bloomberg.


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