H&R Block (HRB) Beats Q4 Earnings and Revenue Estimates

H&R Block Inc. HRB reported fourth-quarter fiscal 2017 (ended Apr 30, 2017) adjusted earnings from continuing operations of $3.76 per share, which beat the Zacks Consensus Estimate of $3.51. Increase in earnings was attributed to a rise in revenues during the quarter.

GAAP earnings from continuing operations came in at $3.79 per share compared with $3.15 in the year-ago quarter.           

H&R Block, Inc. Price, Consensus and EPS Surprise

 

H&R Block, Inc. Price, Consensus and EPS Surprise | H&R Block, Inc. Quote

For full-year fiscal 2017, the company reported adjusted earnings from continuing operations of $1.96 per share compared with $1.53 in the prior year. This improvement was largely due to the company's cost reduction efforts, which also enabled investment in key client-driving initiatives during the year.

Operational Performance

H&R Block reported revenues of $2,327.9 million in the fiscal fourth quarter compared with $2,297.5 million in the prior-year quarter. Revenues beat the Zacks Consensus Estimate of $2,316 million.

For fiscal 2017, the company reported revenues of $3,036.3 million, relatively flat with the prior year. This was due to improvement in the company's Assisted net average charge, partially offset by a decline in return volume.

Total operating expenses declined 3.7% year over year to $1,094.4 million driven by effective cost management.

Financial Position

H&R Block exited the quarter with cash and cash equivalents of $1,011.3 million compared with $896.8 million as of Apr 30, 2016. Total outstanding long-term debt was approximately $1,493 million.

For the fiscal year, net cash used for operating activities was $550.1 million, which was 3.3% higher than the year-ago period.

Share Repurchase and Dividend

In fiscal 2017, the company bought back approximately 14 million shares worth $317 million. As of Apr 30, 2017, 207.2 million shares were outstanding.

The company completed share repurchases under a $3.5 billion share repurchase program as of Aug 2015 which will run through Jun 2019. The company repurchased approximately 70.4 million shares, or 25.5% of shares outstanding at the beginning of the program for an aggregate purchase price of approximately $2.3 billion.

The board of directors declared a quarterly dividend of 24 cents per share, payable on Jul 3 to shareholders on record as of Jun 23. The company has been paying quarterly dividends to its shareholders since the company went public in 1962.

Peer Performance

Intuit Inc. INTU reported adjusted earnings per share of $3.71, surpassing the Zacks Consensus Estimate of $3.67.

Zacks Rank & Key Picks

H&R Block presently carries a Zacks Rank #2 (Buy). A couple of other stocks in the Consumer Services Miscellaneous industry worth considering include Care.com, Inc. CRCM and Weight Watchers International, Inc. WTW, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Care.com has a long-term earnings growth expectation of 15%. It has an average forward PE of 72.9x.

Weight Watchers has a long-term earnings growth expectation of 15%. It has an average forward PE of 21.2x.

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