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H&R Block's (HRB) Q3 Loss Narrower Than Expected, Revenues Beat
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H&R Block, Inc. (HRB - Free Report) reported third-quarter fiscal 2021 adjusted loss per share of $1.17 that came below the Zacks Consensus Estimate of a loss of $1.25. The company had suffered a loss of 59 cents per share in the year-ago quarter.
Revenues of $308 million surpassed the consensus estimate by 35% but decreased 41% year over year. The decline was due to the late start to the U.S. tax season and a later-than-usual opening of IRS e-file, partially offset by increased fees from Emerald Card transactions, rise in small business payments processing and payroll volume at Wave, and improved international results.
Shares of H&R Block have gained 31.1% over the past year compared with 59.9% rally of the Zacks S&P 500 composite.
Quarterly Numbers in Detail
Service revenues of $245 million decreased 42% year over year. Royalty, product and other revenues came in at $64 million, declining 36% year over year.
Pretax loss came in at $284 million compared with a loss of $177 million in the year-ago quarter. Total operating expenses were $572 million, down 15% year over year.
H&R Block exited the quarter with cash and cash equivalents balance of $280 million compared with $209 million at the end of the prior quarter. Long-term debt and line-of-credit borrowings were $2.4 billion compared with $1.6 billion at the end of the previous quarter.
H&R Block used $646 million of cash in operating activities and capex was $21 million. The company paid out dividends of $48 million in the quarter.
2021 Outlook
H&R Block expects revenues in the range of $3.5 billion to $3.6 billion in 2021, the midpoint ($3.55 billion) of which is slightly below the current Zacks Consensus Estimate of $3.56 billion. EBITDA is expected to be between $950 million and $1 billion.
H&R Block currently carries a Zacks Rank #3 (Hold).
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s (INFO - Free Report) fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
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H&R Block's (HRB) Q3 Loss Narrower Than Expected, Revenues Beat
H&R Block, Inc. (HRB - Free Report) reported third-quarter fiscal 2021 adjusted loss per share of $1.17 that came below the Zacks Consensus Estimate of a loss of $1.25. The company had suffered a loss of 59 cents per share in the year-ago quarter.
Revenues of $308 million surpassed the consensus estimate by 35% but decreased 41% year over year. The decline was due to the late start to the U.S. tax season and a later-than-usual opening of IRS e-file, partially offset by increased fees from Emerald Card transactions, rise in small business payments processing and payroll volume at Wave, and improved international results.
Shares of H&R Block have gained 31.1% over the past year compared with 59.9% rally of the Zacks S&P 500 composite.
Quarterly Numbers in Detail
Service revenues of $245 million decreased 42% year over year. Royalty, product and other revenues came in at $64 million, declining 36% year over year.
Pretax loss came in at $284 million compared with a loss of $177 million in the year-ago quarter. Total operating expenses were $572 million, down 15% year over year.
H&R Block exited the quarter with cash and cash equivalents balance of $280 million compared with $209 million at the end of the prior quarter. Long-term debt and line-of-credit borrowings were $2.4 billion compared with $1.6 billion at the end of the previous quarter.
H&R Block used $646 million of cash in operating activities and capex was $21 million. The company paid out dividends of $48 million in the quarter.
2021 Outlook
H&R Block expects revenues in the range of $3.5 billion to $3.6 billion in 2021, the midpoint ($3.55 billion) of which is slightly below the current Zacks Consensus Estimate of $3.56 billion. EBITDA is expected to be between $950 million and $1 billion.
H&R Block currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Some Business Services Companies
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s (INFO - Free Report) fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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