Earnings of payroll solutions provider Intuit Inc. (INTU) increased in the fourth quarter and exceeded estimates. The company also provided guidance for the first quarter and fiscal 2019. Separately, it said CEO Brad Smith and chief technology officer Tayloe Stansbury will be stepping down by year-end, triggering a stock selloff.
Adjusted net profit climbed 60% annually to $85 million or $0.32 per share in the fourth quarter, far exceeding analysts’ prediction. Reported earnings more-than-doubled from the year-ago quarter to $0.18 per share.
Revenues of the Mountain View, California-based company rose 17% to $988 million in the June quarter, surpassing expectations. Small Business and Self-Employed Group grew 20% year-on-year, helped by robust subscriber growth for accounting software package QuickBooks Online. Consumer and Strategic Partner Groups revenue rose by 14%.
“Both Online Ecosystem revenue and QuickBooks Online subscribers grew at a rapid pace. We are also pleased with the strong product innovation in our Consumer business, focused on better serving our customers,” said CEO Brad Smith.
CEO Brad Smith and chief technology officer Tayloe Stansbury will be stepping down by year-end
For the first quarter of 2019, the company sees adjusted earnings per share in the range of $0.09 to $0.11, and a loss between $0.17 per share and $0.19 per share on an unadjusted basis. First quarter revenues are forecast in the $955-$975 million range.
The expectation for the whole of 2019 is adjusted earnings in the $6.40-$6.50 per share range and unadjusted earnings per share between $5.25 and $5.35. The company is looking for full-year revenues in the range of $6.530 billion to $6.630 billion.
In a separate statement, Intuit said president and chief executive officer Brad Smith will step down as CEO by year-end to take up the position of executive chairman of the company’s board of directors. Smith will be succeeded by Sasan Goodarzi who currently serves as EVP and GM of Small Business and Self-Employed Group.
As part of the succession plan, Marianna Tessel, currently serving as SVP and chief product development officer for Small Business and Self-Employed Group, will assume the post of chief technology officer effective January 1, 2019. She will be succeeding Tayloe Stansbury.
Following the announcements, shares of Intuit dropped about 3% during the extended trading hours Thursday after closing the regular session higher.