Intuit Quarter Disappoints, But Tax Season Around the CornerBy Reuters | Posted 2010-11-19 Email Print
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The QuickBooks and TurboTax software vendor's executives were upbeat for future quarters as the tax season approaches.
NEW YORK, Nov 18 (Reuters) - Intuit Inc (NASDAQ:INTU), the maker of TurboTax and QuickBooks accounting software, reported a wider first-quarter loss and its second-quarter outlook missed Street estimates, sending shares lower in after-hours trading.
The company said it expects its EPS to be in the range of 36 cents to 40 cents in the second quarter, short of analysts' estimates of 45 cents on average according to Thomson-Reuters I/B/E/S.
Intuit's EPS outlook may appear weak but it will be spending more on marketing in the quarter to seize opportunity in the tax software market, which is under some shake-up, said Brad Zelnick, a Macquarie Securities analyst.
In October, H&R Block Inc (NYSE:HRB) said it would acquire 2SS Holdings Inc, the developer of TaxACT digital tax preparation business, in a bid to take a chunk of Intuit's market share.
"The shift in marketing spending makes sense to us, especially given the opportunity and confusion in the market created by the pending combination of H&R Block with TaxACT," Zelnick said.
Intuit's executives were upbeat about the second and third quarters, when the company makes most of its profit as consumers buy tax preparation software in the lead-up to tax season.
"We came out of the gate strong and our biggest quarters are ahead of us," said Intuit's Chief Executive Brad Smith in an interview.
The revenue in Intuit's small business group, which includes QuickBooks software, rose 12 percent.
QuickBooks online subscriptions increased 46 percent, which points to growth in a product that generates higher revenue for Intuit.
"The online subscriptions are growing pretty quickly and it has higher margins," said Wedbush Securities analyst Gil Luria.
The software company posted a first-quarter net loss of 12 cents a share, from a loss of 10 cents a share a year ago.
The loss was in line with analysts' estimates for a loss of 12 cents a share, according to Thomson Reuters I/B/E/S.
Revenue in the period ended Oct. 31 rose 12 percent to $532 mln, above the $520.4 million analysts were expecting on average.
Shares fell 3.8 percent after closing at $48.20 on Nasdaq. (Reporting by Liana B. Baker; Editing by Phil Berlowitz)