Upcoming AWS Coverage on Nutrisystem Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 21, 2017 / Active Wall St. announces its post-earnings coverage on H&R Block, Inc. (NYSE: HRB). The Company released its third quarter fiscal 2017 financial and operating results on March 07, 2017. The tax preparer and tax software maker posted narrower than expected loss. The Company typically reports a fiscal third quarter operating loss due to the seasonality of its tax business. Register with us now for your free membership at:

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One of H&R Block's competitors within the Personal Services space, Nutrisystem, Inc. (NASDAQ: NTRI), reported on February 27, 2017, financial results for Q4 and full year ended December 31, 2016. AWS will be initiating a research report on Nutrisystem in the coming days.

Today, AWS is promoting its earnings coverage on HRB; touching on NTRI. Get our free coverage by signing up to:

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Earnings Reviewed

For the quarter ended January 31, 2017, H&R Block's total revenues declined $4.8% million to $451.9 million, primarily due to lower client volumes in the Assisted and do-it-yourself (DIY) tax preparation businesses resulting from the delay in the overall tax season, coupled with the pricing impact of the early season promotions such as Free Federal 1040EZ and H&R Block More Zero. The Company's revenue numbers surpassed analysts' consensus of revenue of $427 million.

For Q3 FY17, H&R Block's total operating expenses fell $17.7 million to $576.7 million. Compensation and benefits and marketing expenses declined as a result of the prior year's cost reduction efforts. The reductions were partially offset by third-party fees associated with the Refund Advance product.

H&R Block's total funded loans amounted to approximately $700 million in Q3 FY17 with the mix between new and prior clients being favorable compared to the Company's expectations. Total direct program costs in February 28, 2017, were approximately $30 million, of which $16 million were recorded in other cost of revenues in Q3 FY17.

H&R Block's Q3 FY17 pre-tax loss increased $4.1 million to $150.6 million. The Company posted net loss of $101 million, or $0.49 per share, compared with a loss of $0.34 per share in in Q3 FY16. Loss from continuing operations increased entirely to reductions in the Company's effective tax rate and shares outstanding. H&R Block's reported numbers were better than the market estimates of a loss of $0.52 per share.

Tax Season Results

H&R Block return volume outperformed industry results when compared to IRS data reported through February 24, 2017. The Company stated that in total, the IRS reported a decline in e-files of 10% compared to H&R Block's decline of 7%. Market share gains were realized in both the Assisted and DIY categories.

In the Assisted category, H&R Block outperformed the industry with a decline of 8% compared to the IRS reported decline of 13%. In the DIY category, H&R Block outperformed the industry with a decline of 5% compared to the IRS reported decline of 8%. H&R Block stated that it expects overall industry and Company volume to improve during the second half of the tax season; the Company's performance relative to the industry is estimated to moderate given the conclusion of its Free Federal 1040EZ and Refund Advance promotions on February 28, 2017.

Balance Sheet

H&R Block stated that during the reported quarter, Mortgage loans and real estate owned were liquidated for a total consideration of $188.2 million, which approximated book value. As of January 31, 2017, the Company's seasonal line of credit borrowings, which are included in long-term debt, were $1.1 billion.

Discontinued Operations

H&R Block's Sand Canyon Corporation's accrual for contingent losses related to representation and warranty claims declined $21 million from the previous quarter to $5 million as a result of settlement payments to counterparties.

Share Repurchases and Dividends

During Q3 FY17, H&R Block repurchased and retired approximately 4.4 million shares at an aggregate price of $100.0 million, or $22.83 per share, bringing the total share repurchases for FY17 to approximately 14.0 million shares for $317.0 million. As of January 31, 2017, 207.2 million shares were outstanding.

H&R Block completed these share repurchases under a $3.5 billion share repurchase program approved by the Company's Board of Directors in August 2015, which will continue through June 2019. Under this program, H&R Block has repurchased approximately 70 million shares of its common stock, or 25.5% of shares outstanding at the beginning of the program, for an aggregate purchase price of approximately $2.3 billion.

H&R Block's director also declared a quarterly cash dividend of $0.22 per share which is payable on April 03, 2017, to shareholders of record as of March 14, 2017. H&R Block has paid quarterly dividends consecutively since the Company went public in 1962.

Stock Performance

At the closing bell, on Monday, March 20, 2017, H&R Block's stock declined 2.37%, ending the trading session at $23.87. A total volume of 4.70 million shares were traded at the end of the day, which was higher than the 3-month average volume of 3.12 million shares. In the last month and previous three months, shares of the Company have advanced 17.20% and 4.36%, respectively. The stock is trading at a PE ratio of 17.64 and has a dividend yield of 3.69%.

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SOURCE: Active Wall Street