H&R Block Surges as Tax Preparer’s Revenue Climbs for Third YearPeter Eichenbaum
H&R Block Inc., the biggest U.S. tax preparer, rose the most in the Standard & Poor’s 500 Index as revenue climbed for a third straight year in fiscal 2015.
The shares advanced 4.5 percent to $32.66 at 11:12 a.m. in New York, the biggest intraday advance since last June. The stock has dropped 3 percent this year.
Revenue for the fiscal year ended April 30 rose 1.8 percent to $3.1 billion, driven by price increases and stronger sales of do-it-yourself tax-preparation products, the Kansas City, Missouri based company said in a statement Monday. Net income for the 12-month period fell 2.6 percent to $487 million, or $1.75 a share, from $500 million, or $1.81, a year earlier. The firm didn’t break out results for the fourth quarter.
“Our DIY products had a very strong year, increasing revenues, return counts, and market share,” Chief Executive Officer Bill Cobb said Monday in a conference call with analysts. “Considering the market pressure placed by our top competitor, who gave away certain products for free, I’m very pleased with our revenue and volume share gains.”
Total filings increased less than 1 percent amid challenges and taxpayer confusion tied to the first year implementation of the Affordable Care Act, Cobb said. The tax season ended with 16 percent of the company’s customers affected by the health-care law, more than H&R block anticipated, he said.
“The vast majority of our clients who were impacted either paid a penalty or claimed an exemption,” said Cobb, 58. “The average penalty was $178, which was much higher than the $95 many taxpayers expected.”
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