H&R Block Inc , the largest U.S. tax preparer, posted a better-than-expected quarterly profit, partly helped by lower operating expenses, but declined to provide a guidance.
On a conference call with analysts, the company said it was not providing an outlook due to uncertainties on employment levels, financial settlement products, tax code changes, and the fact that substantially all of its revenues and earnings are generated in the fourth quarter.
The company said its results reflected the challenging economic conditions of this tax season, as higher unemployment levels led to fewer tax filings.
H&R Block provides tax return preparation services in person, and online through its H&R Block at Home software, formerly known as TaxCut, which competes with bigger tax software rival Intuit's TurboTax.
Earlier this year, Jackson Hewitt Tax Service Inc , H&R Block's rival, said it could not secure a source for refund anticipation loans (RALs) for this year's tax season, as the bank that originated loans terminated its contract.
The development was widely expected to be a huge positive for H&R Block. Tax preparers extend refund anticipation loans at high interest rates to taxpayers, who expect to receive refunds from the government.
H&R Block said it could not take advantage of the refund anticipation loans disruption due to lack of clarity on settlement products.
Separately, troubled tax preparer Jackson Hewitt said it received a notice from the New York Stock Exchange stating that it has fallen below compliance as its market capitalization dropped below $50 million.
For the fourth quarter ended April 30, H&R Block earned $690.8 million, or $2.10 a share, compared with $706.9 million, or $2.08 a share, a year back.
From continuing operations, it earned $2.11 a share.
Analysts were expecting a profit of $2.04 a share according to Thomson Reuters I/B/E/S.
Operating expenses fell 5 percent to $1.22 billion in the quarter.
The company expects to cut operating expenses by $140 to $150 million per year by the end of fiscal year 2012 as a result of the 400 job cuts and closure of 400 tax offices it announced earlier.
Shares of the Kansas City, Missouri-based company closed at $14.96 on the New York Stock Exchange on Thursday.
(Reporting by Archana Shankar in Bangalore; Editing by Prem Udayabhanu)