Intuit Sees No Sign of System Breach -- 2nd Update

By Tess Stynes 

Intuit Inc.'s chief financial officer said Thursday that the online tax-software company hasn't seen any indications that its systems were breached in connection with a wave of fraudulent tax-return filings this month.

The comments from finance chief Neil Williams came after the company reported its revenue rose 3.3% in the January quarter, helped by subscriber growth at its QuickBooks segment.

Earlier this month--after the quarter ended--the fraudulent filings led the company's TurboTax business to halt the transmission of e-filed state tax returns for about 24 hours.

Intuit said it continues to take measures to navigate a heightened sense of concern about tax fraud, and Mr. Williams reiterated in an interview with The Wall Street Journal that Intuit has been working with number of third-party consulting firms to get independent look at its own security systems.

Going forward, TurboTax also has implemented multi-factor authentication to access its online tax services as an added precaution. Mr. Williams added it is too early in the tax season to determine whether there is an increase in tax refund fraud this year, compared with past tax seasons.

It was already a tough tax season for Intuit ahead of the fraudulent filings. The company angered some longtime users of its software by making changes that would have required some customers to upgrade to more expensive versions to file 2014 returns.

But after a furor, the company reversed the changes.

On a conference call, Chief Executive Brad Smith called the upgrade plan "self-inflicted wound" and acknowledged its has been "an eventful few weeks at Intuit."

Intuit shares edged up about 1% after hours and have increased 24% over the past 12 months through Thursday's close.

The company, however, gave a disappointing forecast for the current quarter, guiding for per-share earnings of $2.70 to $2.75 and revenue of $2.075 billion to $2.15 billion. Analysts polled by Thomson Reuters expected a per-share profit decline of 19% to $2.88 and revenue decrease of 7% to $2.23 billion.

Intuit, also known for Quicken, has diversified through a variety of acquisitions. In June, the company bought mobile payment provider Check for about $360 million. Previously, it struck deals for document service DocStoc and tax-return helper GoodApril.

For the period ended Jan. 31, Intuit reported a loss of $66 million, or 23 cents a share, compared with a year-earlier loss of $37 million, or 13 cents a share. Excluding stock-based compensation and other items, the per-share loss from continuing operations was six cents, compared with a year-earlier earnings of two cents. The company expected a loss excluding items of 11 cents to 13 cents a share.

Revenue edged up to $808 million, exceeding the company's expectations for $780 million to $800 million.

The company said it added more than 100,000 QuickBooks Online subscribers versus the previous quarter, bringing total paying subscribers worldwide to 841,000.

Intuit also affirmed its guidance for the year ending in July.

-Laura Saunders contributed to this article.

Write to Tess Stynes at [e-mail]

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