Intuit Reports Better-Than-Expected Earnings

By Ezequiel Minaya 

Intuit Inc., the maker of TurboTax software, on Tuesday reported better-than-expected results for its third quarter, with adjusted earnings easily beating expectations, as the company benefited from the sale of several businesses.

The company also raised its annual guidance for revenue and adjusted earnings per share.

For the fiscal year, Intuit now expects revenue in the range of $4.66 billion to $4.68 billion with adjusted earnings between $3.63 a share and $3.65 a share. Previously, the company had projected sales between $4.53 billion and $4.61 billion with earnings in the range of $3.45 and $3.50.

For the current quarter, the company expects revenue between $720 million and $740 million with adjusted per-share earnings roughly break-even. Analysts, meanwhile, forecast $719 million of revenue and an adjusted loss of a penny a share.

The company typically collects the bulk of its earnings during tax season and posts losses in its off-tax-season quarters. It has been looking to pare down and in March announced it has found a buyer for its Quicken segment. The business was slated for sale to private-equity firm HIG Capital.

The move came after Intuit said last summer that it would seek to sell several business units, including collaboration platform QuickBase and communications software business Demandforce in addition to Quicken, in a move to focus on its core small-business and tax-preparation businesses.

On Tuesday the company said that it had completed the sales of Demandforce, QuickBase and Quicken businesses for $463 million in cash. Intuit recorded a $354 million pretax gain on the divestures, which translated into a net gain of $176 million during the quarter. In contrast, the company posted a $155 million lost in the same period a year earlier connected to discontinued businesses.

Over all for the latest quarter, Intuit reported a profit of $1.03 billion, or $3.94 a share, compared with a year-ago profit of $501 million, or $1.78 a share.

Excluding certain items, profit was $3.43 a share, up from $2.85 a share a year earlier. Revenue climbed 8% to $2.3 billion.

The company had expected revenue between $2.21 billion to $2.26 billion with adjusted earnings between $3.15 a share and $3.20 a share. Analysts surveyed by Thomson Reuters had projected adjusted profit of $3.21 a share on $2.25 billion in revenue.

The small-business segment's revenue increased 12% while the consumer and professional tax division posted a 7% increase.

Intuit also repurchased some $465 million of shares during the quarter, cutting shares outstanding by about 20 million compared with the same quarter a year ago. The company has $435 million left on its current authorization.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

May 24, 2016 17:55 ET (21:55 GMT)

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