Why H&R Block Shares Shot Up
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of H&R Block were up as much as 10% after the tax specialist presented a bright outlook in its quarterly report last night.
So what: The tax preparer's third-quarter loss was worse than expected at an adjusted figure of a $0.22 loss instead of a $0.03 loss, due to a the start of the tax season being delayed by a week, but as a highly seasonal business, it's the current quarter that really counts. On yesterday's conference call, CEO Bill Cobb said he expected tax filings this season to grow 1% to 2%, and believed his company to be outperforming the competition. Analysts had been projecting earnings of $2.49 per share for the current quarter, but will likely bump up ahead of estimates after this report.
Now what:Through Feb. 28, total returns handled by H&R block were actually down 5.8% but that was mostly the result of IRS delays. The expiration of the Bush tax cuts, and the new health care law could also help drive future business for H&R Block. The company does nearly 75% of its annual sales in the tax-season quarter so it's crucial that its upcoming results live up to management's promises. You can make sure you don't miss H&R Block's next report by adding the company to your watchlist here.
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The article Why H&R Block Shares Shot Up originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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