KANSAS CITY, Mo. – H&R Block’s net loss widened in its fiscal third quarter because of a delay to the start of this year’s tax season.
The tax preparation company, based in Kansas City, Mo., said Thursday that its net loss in the three months ended Jan. 31 was $17.7 million, or 7 cents per share. That compares with a loss of $3.3 million, or a penny per share, in the same period a year earlier.
Revenue fell 29 per cent, to $472 million.
Adjusting for one-time items, H&R Block’s loss was $60 million, or 22 cents per share.
The results were weaker than Wall Street had expected. Analysts surveyed by FactSet had, on average, anticipated an adjusted loss of a penny per share on revenue of $563.6 million.
Tax season started late this year because Congress and President Barack Obama reshuffled the tax code in legislation passed in early January. The legislation was designed to avoid the so-called fiscal cliff, a package of tax increases and government spending cuts that were set to take effect in January if Congress and the White House failed to reach a deal.
The final agreement included boosting income tax rates for the wealthiest Americans and extending the existing, lower rates for everyone else. The deal also changed the way investment income is taxed and allowed the expiration of a temporary reduction in the Social Security payroll tax.
The IRS needed an extra two weeks to implement those changes, H&R Block said. It did not begin accepting tax returns until Jan. 31, the end of H&R Block’s quarter. The IRS usually starts accepting returns in mid-January, H&R Block said.
Some forms were not accepted by the IRS until early March, the company said.
As a result, total U.S. tax returns handled by H&R Block fell 5.8 per cent through Feb. 28, compared with the previous year.
H&R Block said, however, it believes that tax filings are arriving roughly two weeks later than last years’ and volume will recover and increase 1 to 2 per cent over last year’s levels.
The company’s stock rose 52 cents, or 2 per cent, to $25.50 in extended trading following the release of the earnings report. It is up over 30 per cent so far this year.
Daniel Wagner can be reached at www.twitter.com/wagnerreports.