Mortgage Unit Hurts H&R Block Profits
H&R Block , the largest U.S. tax preparer, on Thursday said its quarterly loss nearly doubled, hurt by weakness in its mortgage operations.
For its fiscal second quarter ending Oct. 31, H&R Block's net loss rose to $156.5 million, or 49 cents per share, from $81.2 million, or 25 cents, a year earlier.
Revenue fell 7% to $563.2 million.
"The issue for us in the second quarter was ongoing weakness in the mortgage industry," Chief Executive Mark Ernst said in a statement.
Ernst said, however, that November results in tax services, the company's main business, are "encouraging." The company generates much of its profit and revenue in the quarter ending April 30, which includes the main U.S. tax filing season.
H&R Block's mortgage unit posted a $39 million pretax loss, compared with a year-earlier $48.8 million profit, as lending declined, margins shrank and credit losses rose.