The Gory Details on H&R Block's Double Miss

Seth Jayson, The Motley Fool
Updated

H&R Block (NYS: HRB) reported earnings on June 12. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended April 30 (Q4), H&R Block missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share expanded significantly. GAAP earnings per share expanded significantly.


Margins grew across the board.

Revenue details
 H&R Block tallied revenue of $2.20 billion. The five analysts polled by S&P Capital IQ anticipated a top line of $2.29 billion on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $1.96 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $2.54. The nine earnings estimates compiled by S&P Capital IQ predicted $2.60 per share. Non-GAAP EPS of $2.54 for Q4 were 23% higher than the prior-year quarter's $2.06 per share. (The prior-year quarter included -$0.02 per share in earnings from discontinued operations.) GAAP EPS of $2.42 for Q4 were 22% higher than the prior-year quarter's $1.99 per share. (The prior-year quarter included -$0.02 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 70.9%, 100 basis points better than the prior-year quarter. Operating margin was 51.9%, 90 basis points better than the prior-year quarter. Net margin was 30.2%, 30 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $99.3 million. On the bottom line, the average EPS estimate is -$0.38.

Next year's average estimate for revenue is $3.09 billion. The average EPS estimate is $1.87.

Investor sentiment
 The stock has a two-star rating (out of five) at Motley Fool CAPS, with 354 members out of 539 rating the stock outperform, and 185 members rating it underperform. Among 144 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 93 give H&R Block a green thumbs-up, and 51 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on H&R Block is outperform, with an average price target of $28.33.

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The article The Gory Details on H&R Block's Double Miss originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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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Originally published