(Reuters) - H&R Block Inc (HRB.N) reported a bigger-than-expected quarterly loss due to a delayed start to the U.S. tax season, but the tax preparer said it expects cost cuts to drive its profit in fiscal 2013.
The Internal Revenue Service (IRS) delayed the start of the tax filing season by eight days to January 30 to account for the enactment of tax law changes made to resolve the “fiscal cliff”.
“The delayed start to this tax season led to a material shift of business from our fiscal third quarter to our fiscal fourth quarter,” Chief Financial Officer Greg Macfarlane said in a statement.
H&R block said its revenue fell 29 percent to $472 million in the latest quarter. It deferred $15 million of revenue to its fourth quarter as the IRS did not accept returns that included certain forms prior to January 31.
The delayed tax season has also hit rival Intuit Inc (INTU.O) as revenue from its TurboTax software fell 27 percent in the second quarter.
H&R block said it expects a pretax earnings boost of $85 to $100 million from cost cuts in fiscal 2013.
The company has been realigning its focus to its core tax preparing business after several years of losing customers to do-it-yourself tax filing services such as Intuit’s TurboTax.
It cut jobs, shut stores and overhauled its management last year to focus on the fast-growing digital tax preparation segment.
“Our cost reduction initiatives remain on track and we continue to believe that we’ll deliver significant earnings and margin expansion in fiscal 2013,” Macfarlane said.
Net loss from continuing operations was $17 million, or 6 cents per share, in the third quarter ended January 31, compared with a loss of $3.6 million, or 1 cent a share, a year ago.
Revenue fell 29 percent to $472 million.
Excluding items, the company reported a loss of 22 cents per share.
Analysts on an average were expecting a loss of 1 cent per share on revenue of $563.60 million, according to Thomson Reuters I/B/E/S.
Shares of the Kansas City, Missouri-based company, which has risen about 39 percent since its last quarterly results, were trading up more than 4 percent after the bell. They closed at $24.98 on Thursday on the New York Stock Exchange.
Reporting by Avik Das and Anil D'Silva in Bangalore; Editing by Saumyadeb Chakrabarty