H&R Block (HRB) FY18 Q2 Loss Narrower on Higher Revenues

H&R Block Inc. HRB reported second-quarter fiscal 2018 (ended Oct 31, 2017) loss from continuing operations of 71 cents per share, narrower than the Zacks Consensus Estimate of loss of 73 cents. Better-than-expected results were attributable to a rise in revenues during the quarter.

Consolidated loss for the quarter came in at 74 cents per share compared with loss of 68 cents in the year-ago quarter.

Operational Performance

H&R Block reported revenues of $140.9 million in the fiscal second quarter compared with $131.3 million in the prior-year quarter. The year-over-year increase in revenues was primarily due to higher international tax preparation fees, positive fluctuations in foreign exchange rates, and favorable pre-season results in the domestic market. Revenues beat the Zacks Consensus Estimate of $128 million.

H&R Block, Inc. Price, Consensus and EPS Surprise

 

H&R Block, Inc. Price, Consensus and EPS Surprise | H&R Block, Inc. Quote

Total operating expenses increased 5% year over year to $357 million, due to higher occupancy and compensation costs.

Financial Position

H&R Block exited the quarter with cash and cash equivalents of $181 million compared with $232.5 million in the year-ago period. Total outstanding long-term debt was approximately $1,493.8 million compared with $1,967.2 million in the prior-year quarter.

For the first six months of fiscal 2018, net cash used for operating activities was $648.5 million, compared with cash utilization of $720.4 million in the year-ago quarter.

Dividend

The board of directors declared a quarterly dividend of 24 cents per share, payable on Jan 2 to shareholders on record as of Dec 4. The company has been paying quarterly dividends to its shareholders since the company went public in 1962.

Zacks Rank & Stocks to Consider

HRB expects to continue with improved financial performance in the remainder of fiscal 2018 with increase in client trajectory. H&R Block presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Care.com, Inc. CRCM, SP Plus Corp. SP and Visa Inc. V, each carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Care.com has a long-term earnings growth expectation of 15%. It topped earnings estimates thrice in the trailing four quarters with an average positive surprise of 275%.

SP Plus has a long-term earnings growth expectation of 10%. It topped earnings estimates in each of the trailing four quarters with an average positive surprise of 33.3%.

Visa has a long-term earnings growth expectation of 16.9%. It topped earnings estimates in each of the trailing four quarters with an average positive surprise of 8.1%.

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