H&R Block (HRB) Thursday reported a wider net loss for the second quarter of 2019, owing to higher expenses and seasonal factors that more than offset a rise in revenues. Though the results came in above estimates, shares of the tax consultancy firm dropped modestly in premarket trading.
Net loss from continuing operations, adjusted for one-time items, widened to $171 million or $0.83 per share from $148 million or $0.71 per share in the second quarter of 2018. Analysts were looking for a bigger loss.
Meanwhile, revenues moved up 6% to $148.9 million in the second quarter from $140.8 million in the same period last year and exceeded analysts’ forecast, aided by a marked increase in Assisted Tax preparation and the timing of revenues from Tax Plus products. There was a 2% rise in operating costs to $364 million, mainly reflecting higher occupancy and compensation expenses.
Revenues rose 6%, aided by a marked increase in Assisted Tax preparation and the timing of revenues from Tax Plus products
“The fiscal second-quarter results reflect planned increases in expenses related to strategic investments being made in the business. We are focused on executing the operational elements of our strategy for the upcoming tax season, and remain on track to achieve our financial outlook for the fiscal year,” said H&R Block CFO Tony Bowen.
H&R Block stock plunge 11% despite Q4 earnings and revenue beat
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The management said it is making various preparations for the upcoming tax season, including virtual tax innovations and measures to ensure transparent pricing in all of the company’s channels.
H&R Block shares dropped about 5% in the past six months, underperforming the S&P 500. The stock closed the last trading session lower and lost further in the premarket trading Thursday after the earnings report.