H&R Block Sees Wider Third-Quarter Loss On Loan Charges
H&R Block said its fiscal third-quarter loss was larger than first reported because of a decision to write down the value of its Option One Mortgage business, which is up for sale.
Still, Chairman and Chief Executive Mark Ernst told CNBC that he remains optimistic that the unit remains attractive to buyers.
In a Form 10-Q filed with the Securities and Exchange Commission Wednesday, the nation's largest tax preparer said a $29.2 million reduction in carrying value for the mortgage business pushed its quarterly loss up by $15.5 million, to $60.3 million or 18 cents a share.
H&R Block initially reported a loss of $44.7 million, or 14 cents a share, in February.
"In light of the extreme volatility in the mortgage market, we conducted a rigorous review of the carrying value of all the assets of our Option One Mortgage Corporation subsidiary," Ernst said, in a written statement. "We continue to believe that the net asset value in this business is appropriate and prudent."
During his CNBC interview, Ernst said the write-down was not significant relative to the unit's $1.3 billion total value. He also said that the unit's business is strong due to steps taken a year ago.
"We believe high quality lenders like Option One are going to fare very well in this environment and come out the other end as a stronger business," Ernst said. "Throughout this process, we have found there are very sophisticated investors who recognize that as a reality and are very interested in the business."
Ernst said he plans to update the market on its progress in selling the unit later this month.