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H&R Block (HRB) Gains 9.7% After Beating Q4 Earnings Estimates
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H&R Block, Inc. (HRB - Free Report) reported impressive fourth-quarter fiscal 2023 results wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Shares have soared 9.7% since the earning release on Aug 15 owing to the better-than-expected results and impressive earnings per share (EPS) guidance for 2024.
Adjusted EPS is projected to be between $4.1 and $4.3, the midpoint ($4.2) of which is above the current Zacks Consensus Estimate of EPS of $4.1.
Fourth-quarter fiscal 2023 adjusted EPS of $2.05 (excluding 9 cents from non-recurring items) surpassed the consensus estimate by 8.5%. Earnings rose 43.4% on a year-over-year basis.
Revenues of $1.03 billion also exceeded the consensus estimate by 2% but decreased 1.7% year over year. The top line was positively impacted by a higher net average charge in the Assisted category.
Revenues from U.S. tax preparation and related services came in at $913.16 million, declining slightly from the year-ago figure. Revenues from Financial services came in at $16.5 million, 25.9% lower than the year-ago figure.
EBITDA for the reported quarter came at $422.82 million, 21.9% higher than the year-ago figure. This compares favorably with our expectation of an EBITDA of $408 million, up 17.6% year over year. EBITDA margin expanded 790 basis points (bps) year over year to 40.9%. This compares with our expectation of an EBITDA margin of 40.3%, up 730 bps year over year.
H&R Block exited the quarter with cash and cash equivalents of $986.98 million, compared with $909.1 million at the end of the prior quarter. Long-term debt and line of credit borrowings were $1.48 billion, in line with the previous quarter.
H&R Block generated $323.45 million of cash from operating activities while capex was $13 million.
2024 Outlook
H&R Block expects revenues in the range of $3.530-$3.585 billion. The midpoint of the guided range ($3.56 billion) lies below the current Zacks Consensus Estimate of $3.57 billion.
EBITDA is anticipated to be between $930 million and $965 million. The effective tax rate is expected to be around 23%.
Gartner (IT - Free Report) reported better-than-expected second-quarter 2023 results. Adjusted EPS (excluding 37 cents from non-recurring items) of $2.85 beat the Zacks Consensus Estimate by 14.9% but matched the year-ago reported figure. Revenues of $1.5 billion beat the consensus estimate by 1% and improved 9.2% year over year on a reported basis and 10% on a foreign-currency-neutral basis. Total contract value was $4.6 billion, up 8.9% year over year on a foreign-currency-neutral basis.
Automatic Data (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted EPS of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago fiscal quarter’s figure. Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago fiscal quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
TransUnion (TRU - Free Report) reported impressive second-quarter 2023 results wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings of 86 cents per share (adjusting 58 cents from non-recurring items) surpassed the consensus mark by 3.6% but decreased 12.2% year over year. Total revenues of $968 million beat the consensus mark by 1% and increased 2.1% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in international markets.
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H&R Block (HRB) Gains 9.7% After Beating Q4 Earnings Estimates
H&R Block, Inc. (HRB - Free Report) reported impressive fourth-quarter fiscal 2023 results wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Shares have soared 9.7% since the earning release on Aug 15 owing to the better-than-expected results and impressive earnings per share (EPS) guidance for 2024.
Adjusted EPS is projected to be between $4.1 and $4.3, the midpoint ($4.2) of which is above the current Zacks Consensus Estimate of EPS of $4.1.
Fourth-quarter fiscal 2023 adjusted EPS of $2.05 (excluding 9 cents from non-recurring items) surpassed the consensus estimate by 8.5%. Earnings rose 43.4% on a year-over-year basis.
Revenues of $1.03 billion also exceeded the consensus estimate by 2% but decreased 1.7% year over year. The top line was positively impacted by a higher net average charge in the Assisted category.
H&R Block, Inc. Price, Consensus and EPS Surprise
H&R Block, Inc. price-consensus-eps-surprise-chart | H&R Block, Inc. Quote
Other Quarterly Numbers
Revenues from U.S. tax preparation and related services came in at $913.16 million, declining slightly from the year-ago figure. Revenues from Financial services came in at $16.5 million, 25.9% lower than the year-ago figure.
EBITDA for the reported quarter came at $422.82 million, 21.9% higher than the year-ago figure. This compares favorably with our expectation of an EBITDA of $408 million, up 17.6% year over year. EBITDA margin expanded 790 basis points (bps) year over year to 40.9%. This compares with our expectation of an EBITDA margin of 40.3%, up 730 bps year over year.
H&R Block exited the quarter with cash and cash equivalents of $986.98 million, compared with $909.1 million at the end of the prior quarter. Long-term debt and line of credit borrowings were $1.48 billion, in line with the previous quarter.
H&R Block generated $323.45 million of cash from operating activities while capex was $13 million.
2024 Outlook
H&R Block expects revenues in the range of $3.530-$3.585 billion. The midpoint of the guided range ($3.56 billion) lies below the current Zacks Consensus Estimate of $3.57 billion.
EBITDA is anticipated to be between $930 million and $965 million. The effective tax rate is expected to be around 23%.
H&R Block currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Gartner (IT - Free Report) reported better-than-expected second-quarter 2023 results. Adjusted EPS (excluding 37 cents from non-recurring items) of $2.85 beat the Zacks Consensus Estimate by 14.9% but matched the year-ago reported figure. Revenues of $1.5 billion beat the consensus estimate by 1% and improved 9.2% year over year on a reported basis and 10% on a foreign-currency-neutral basis. Total contract value was $4.6 billion, up 8.9% year over year on a foreign-currency-neutral basis.
Automatic Data (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted EPS of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago fiscal quarter’s figure. Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago fiscal quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
TransUnion (TRU - Free Report) reported impressive second-quarter 2023 results wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings of 86 cents per share (adjusting 58 cents from non-recurring items) surpassed the consensus mark by 3.6% but decreased 12.2% year over year. Total revenues of $968 million beat the consensus mark by 1% and increased 2.1% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in international markets.