NEW YORK (Reuters) - H&R Block Inc (HRB) shares on Tuesday rose 10 percent, the biggest gain in more than seven months, after the largest U.S. tax preparer said profit topped forecasts in the quarter that included the main tax filing season, by far the company's most important.
The stock closed up $1.56 at $17.23 on the New York Stock Exchange, the highest close since April 6.
Net income for the fiscal fourth quarter ended April 30 rose 30 percent to $706.9 million, or $2.09 per share, from $543.6 million, or $1.66 per share, a year earlier. Revenue fell 3 percent to $2.47 billion.
Analysts on average had expected a profit of $2.05 per share, according to Reuters Estimates. H&R Block also projected fiscal 2010 profit of $1.60 to $1.80 per share, topping most analysts' estimates. Analysts on average expected $1.64.
The Kansas City, Missouri-based company typically makes most, if not all, of its annual profit and more than half its annual revenue in the February-to-April quarter. Revenue for the period fell 3 percent to $2.47 billion.
Chairman Richard Breeden has been refocusing H&R Block on tax preparation after shedding a money-losing subprime mortgage business as well as a brokerage unit.
Breeden, formerly U.S. Securities and Exchange Commission chairman, is now a private investor and one of H&R Block's largest shareholders.
Chief Executive Russ Smyth said the company plans to continue focusing on customers who file returns online.
Overall retail tax returns fell 5.8 percent as customers feeling the effects of the economy sought to reduce their tax preparation costs.
"We grew our client base and increased our market share with great success in the online category, which we believe is the key battleground," Smyth said on a conference call.
Jackson Hewitt Tax Service Inc (JTX), H&R Block's main rival, last Thursday said quarterly profit fell 28 percent, while revenue declined 17 percent.
Source: reuters