Intuit Thinks Its Key Quarter Will Keep Going (INTU)

Intuit (INTU-NASDAQ) is a true odd-bird in technology and software, particularly since its last quarter is the crux of its entire year EPS year in and year out.  The company fell 8% in march on weak TurboTax sales although it stuck by guidance. Then it gave reiterated guidance again in April.  Mysteriously today, the company beat and suddenly "guided higher."  It sure sounds like these guys get overly pumped each year right after the first tax season rush.  Shares were less than 10% above the 52-week lows, yet all of a sudden shares are up 8% in after-hours up at $30.00.

INTU posted earnings of $1.13 non-GAAP EPS vs $1.08 estimates and revenues of $1.15 billion versus $1.12 billion estimates.  It also raised fiscal July-07 guidance: Revenue prior guidance: $2.625 billion to $2.675 billion, representing annual growth of 12-14%. New guidance: $2.685 billion to $2.7 billion, representing annual growth of approximately 15%. GAAP diluted earnings per share – Former guidance: $1.10 to $1.14. New guidance: $1.15 to $1.17.  Non-GAAP diluted earnings per share – Former guidance: $1.33 to $1.37. New guidance: $1.38 to $1.40. The new guidance represents annual EPS growth of 14-16%.

Intuit also announced today a new stock repurchase program for up to $800 million over the next three years. Intuit used all remaining funds in its last $500 million repurchase program, authorized in May 2006, during its third-quarter 2007, which ended on April 30. Since authorizing its first stock repurchase program in May 2001, Intuit has spent approximately $3.7 billion to repurchase approximately 159 million shares of its stock.

It’s always amazing how some companies that have major seasonal operations like a tax software company are able to be so optimistic after their key quarter.  Oh well, it’s America and everyone is happier when they receive a one-time check.  This one is even more dependent upon your "trust of a company" than most, so skeptics may view this one with more questions even if it does actually all look good. 

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.