Jackson Hewitt Tax Services (JTX) Might Breach Financial Covenants

Shares of Jackson Hewitt Tax Services (NYSE: JTX) were down 8% in afternoon trading, after the no. 2 tax preparer swung to a 3rd quarter loss and announced that it was in danger of breaching financial covenants.

Jackson Hewitt Tax Services reported a 3rd quarter loss of $279 million, or $9.75 per share, compared to earnings of $20.9 million, or 73 cents per share, a year earlier.

Adjusted earnings fell 38% to $13.1 million, or 46 cents per share, down from $21 million, or 74 cents per share, a year earlier.

According to a poll of analysts by Thomson Reuters, the average analyst estimate was earnings of 48 cents per share.

Jackson Hewitt Tax Services also announced that it is in danger of breaching financial covenants in April and said that it will have talks with the lead agent under the company's credit facility in order to obtain relief on the financial covenants.

Shares of Jackson Hewitt were down 15% to $2.08 per share shortly after trading started on Thursday morning.

The shares had recovered some of their losses and were down 8% to $2.27 per share during afternoon trading.