Morgan Stanley Analyst: Intuit To Pay For Public Relations Debacle

Intuit Inc. INTU may loose business to competitors as a result of a customer relations debacle related to its tax-filing software, an analyst said Wednesday.

Intuit recently tinkered with its TurboTax Deluxe software, forcing certain customers to upgrade to a premium version of the product.

"We think Intuit will lose some customers" to H&R Block Inc. HRB, Morgan Stanley's Jennifer Swanson Lowe said.

Block launched an advertising last month tied to Intuit's woes, offering a free version of Block software to anyone who purchased Intuit Deluxe.

Intuit Chief Executive Brad D. Smith recently apologized to customers in a LinkedIn video, saying the company "mishandled" the issue and offering a $25 rebate to those affected.

But Lowe cut her growth forecast for Intuit's consumer tax revenue Wednesday to 4 percent, from 6 percent, and said the snafu threatens Wall Street's consensus estimate for 2015 earnings of $2.48 a share.

Lowe reduced her 2015 earnings estimate nearly 3 percent to $2.41 a share.

While Intuit's rebate is aimed at stemming losses, "we think the negative press will still affect market share," Lowe said.

intuit is expected to post a quarterly loss February 19 of $0.13 a share on revenue of $785.9 million.

H&R Block has gained more than 5 percent during the past four weeks, changing hands recently at $34.94, up $0.02 cents.

In the same period, Intuit is off 0.7 percent, and traded Wednesday at $90.67, up $0.17 cents.