Banking, finance, and taxes

What to Expect From H&R Block Earnings

Chris Lange

Published: August 30, 2016 9:15 am

Last Updated: March 13, 2020 10:08 pm

H&R Block Inc. (NYSE: HRB) is scheduled to release its fiscal first-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for a net loss of $0.53 per share and $132.62 million in revenue. The same period from last year reportedly had a net loss of $0.35 per share and revenue of $138 million.

Unfortunately, the most recent tax season was not as favorable as the company was hoping. As a result, the company wanted to move on past this. Historically, the August quarter is when H&R Block rolls out its share repurchase plan, and with the share price where it is year over year, we might expect a sizable buy back. At this time last year, the company announced a huge $1.5 billion repurchase plan, which was over 20% of the market cap then.

In the most recent quarter, the company announced new plans to attack the 2017 tax season, building on those areas of the business in which the firm was successful, such as pricing, mix, improved product attach levels, and the successful launch of the new Block Advisors brand.

Hopefully the company can turn itself around to close out 2016 despite looking to post losses for the rest of the calendar year.

A few analysts weighed in on this tax preparer prior to the release of the earnings report:

• Macquarie initiated coverage with an Outperform rating and a $28 price target.
• Piper Jaffray reiterated a Buy rating with a $29 price target.
• Credit Suisse has a Hold rating.
• Oppenheimer reiterated a Hold rating.
• BTIG Research reiterated a Hold rating.
• BMO Capital Markets reiterated a Hold rating with a $24 price target.
• Morgan Stanley reiterated a Buy rating with a $26 price target.

So far in 2016, H&R Block has underperformed the broad markets, with the stock down 25%. Over the past 52 weeks, the stock is down as much as 27%.

Shares of H&R Block were trading around $24.55 early Tuesday. The stock has a consensus analyst price target of $19.18 and a 52-week trading range of $19.18 to $37.53.