H&R Block Shares Leap as Profit Tops Forecasts

H&R Block, the largest U.S. tax preparer, on Monday said profit rose 26 percent in the quarter encompassing the main tax filing season, beating expectations as customers turned to its Internet service for tax preparation.

H&R Block shares jumped about 6 percent in after-hours trade following the company's earnings report.

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H&R Block said it expects earnings of $1.60 to $1.80 per share in fiscal 2010, compared with $1.64 expected by analysts polled by Reuters Estimates.

Tax returns prepared using H&R Block online products jumped 45.2 percent in fiscal 2009, the company said. Overall retail tax returns fell 5.8 percent, while the net average retail fee per return prepared increased 7.2 percent.

Net income for the fiscal fourth quarter ended April 30 rose to $706.9 million, or $2.09 per share on a diluted basis, from $543.6 million, or $1.66, a year earlier. Revenue was down 2.7 percent at $2.47 billion.

Analysts on average expected profit of $2.05 per share. H&R Block typically generates most if not all its annual profit and well over half its annual revenue in the fiscal fourth quarter.

H&R Block shares have fallen 41 percent from their 52-week high of $26.75 set last Sept. 19, despite Chairman Richard Breeden's efforts to focus the company on tax preparation, shedding a money-losing subprime mortgage business and a securities brokerage.

Last month, H&R Block replaced Timothy Gokey, who had led its retail tax business for five years.

Jackson Hewitt Tax Service , H&R Block's main rival, last Thursday said quarterly profit fell 28 percent, while revenue declined 17 percent.

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H&R Block shares rose to $16.40 after closing up 25 cents at $15.67 on the New York Stock Exchange. They began the year at $22.72.

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