Intuit Tops, Raises Outlook - Analyst Blog

Intuit Inc. (INTU) reported revenue of $837 million in the second quarter of fiscal 2010, up 8% year over year and was more than the top-end of the guidance provided by management by $20 million. Intuit is a leading provider of business and financial management solutions for small and medium-sized businesses, consumers, accounting professionals and financial institutions.

The flagship products and services of the company include QuickBooks, Quicken and TurboTax, simplify small business management and payroll processing, personal finance, and tax preparation and filing. ProSeries and Lacerte are Intuit’s leading tax preparation offerings for professional accountants.The Financial Institutions division is anchored by Digital Insight and provides online banking services that help banks and credit unions serve consumers and businesses with innovative solutions.

On a segment basis, Consumer tax group reported revenues of $216 million, up 15% year over year driven by strong early season filing, particularly on the web.

Accounting professional segment reported revenues of $124 million, down 7% year over yea due to a revenue shift of $9 million that was deferred from the second quarter to the third quarter. Excluding this shift, revenue would have been flat.

Revenue grew 5% in the small business group. The growth was driven by payment solutions revenue which grew 14% and employee management solutions revenue which was up 12%. However, financial management solutions revenue was down 3%.

Revenue grew 10% in the financial institutions division and bill pay users grew 16%. Intuit integrated its TurboTax Online product with Digital Insight’s online banking platform, making it easier for financial institution customers to in turn offer online tax preparation to their customers.

Other businesses segment posted a revenue growth of 38% in the second quarter driven primarily by strength in personal finance. The personal finance business is benefiting from a strong new Quicken desktop release and the Mint acquisition.

Operating income grew 20% year over year to $206 million. Earnings per share (EPS) came in at 38 cents easily beating the Zacks Consensus Estimate of 25 cents.

During the quarter, Intuit repurchased shares worth $250 million and still has $350 million remaining in its share repurchase program. The company exited the quarter with cash, equivalents and investments of $946 million.

Based on a strong first half, particularly in the tax business, Intuit raised its full-year revenue and earnings guidance.

For fiscal year 2010, Intuit now expects revenue to grow around 6% – 9% implying a revenue guidance of $3.3 billion – $3.4 billion. The company earlier expected revenues to grow around 4% – 8%. Operating margin is estimated at 30% or more. EPS is projected between $1.97 and $2.04, up from the previous projection of $1.89 to $1.96.

Third Quarter is a seasonally strong quarter for the company. For the third-quarter, Intuit estimates revenues between $1.51 billion and $1.59 billion, up 7% – 12%. EPS is forecasted between $1.75 and $1.85.
 

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