- Peter Kinder resigns federal agency post, concludes position unnecessary and waste of tax dollars (6/16/18)2
- Stormy Daniels to visit East Cape Girardeau (6/13/18)20
- Longtime downtown Cape bartender Marcellus Jones remembered by friends (6/12/18)2
- A community rallies behind Honorable Young Men's Club (6/16/18)1
- Couple charged in beating death at Brick's (6/13/18)
- Southeast to spend $150,000 to refresh brand with Ohio firm (6/19/18)6
- New urban dance studio opens on Broadway (6/15/18)2
- Jackson natives compete in 260-mile canoe race (6/16/18)1
- Feeding deer in Bollinger, Cape and Perry counties prohibited soon to help curb spread of CWD (6/13/18)7
- New Zaxby's restaurant open in Cape (6/13/18)3
H&R Block sees 4th quarter charge
H&R Block Inc. on Thursday said it will record a 5-cent-per-share charge in its fiscal fourth quarter, due to losses on its Emerald Advance line of credit.
The nation's largest tax preparer blamed the charge on losing some former clients who got Emerald Advance loans during the holidays. The high unemployment rate also likely played a role, the company said.
Those customers would typically pay back those loans using a portion of their tax refunds. But some apparently went elsewhere to get their taxes prepared when they learned they couldn't get short-term loans backed by tax refunds, or refund anticipation loans, from H&R Block this year.
Block lost its financing for the loans in late December, too close to tax season to find another bank to back them.
Analysts, on average, are expecting Block to report profit of $2.14 per share, on revenue of $2.3 billion, according to data provided by FactSet.
Last year, Block posted profit of $2.10 per share on revenue of $2.34 billion for its fourth quarter. The quarter is the company's strongest of the year because of the seasonal nature of the tax business.
H&R Block shares slipped 31 cents to $17.66 in aftermarket trading. The stock closed the regular session up 45 cents at $17.97.
The charge tempered a positive report that showed the company prepared 5.7 percent more tax returns through the end of March than through the same period last year.
That increase was slightly lower than the 6 percent increase reported through the end of February.
The gain is strong, however, when considered against Internal Revenue Service data that show overall tax filings through March 25 fell 0.3 percent.
Total retail returns prepared at H&R Block stores through the end of March were up 2.6 percent from last year. That figure was also down a bit from a 3.2 percent gain through the prior month.
Digital returns prepared grew 13.3 percent compared with 2010, including a 29.2 percent increase in online filings.
That represented a faster pace of growth than the 12.7 percent increase reported through the end of February for digital returns. Online filing growth slowed, however, from a 30.2 percent increase through February.
The rest of the digital gains came from a higher number of returns prepared using Block's over-the-counter software, which rose 1.4 percent, compared with a 0.9 percent drop through March last year.
Improvements in digital returns are a positive sign for Block, which has significantly lagged the competition in providing software for do-it-yourself preparation in recent years.
Block expects that for the full tax season, it will prepare between 2 and 2.5 percent more returns than last year.
The average preparation fee fell to $187.93 through March. That was up from $179.07 at the same time last year, but lower than the $188.65 average fee reported through February.
Analysts have expressed some concern about declining fees. The company expects average fee per return to drop between 2.5 percent and 3.5 percent for the season.
That's a narrower projection than the 2 percent to 4 percent decline forecast a month ago. At that time, the company said it expected the average fee to drop because of an early-season promotion that offered free 1040-EZ tax preparation to new customers.
The company offered the free returns as part of a long-term strategy: It intended to gain goodwill and demonstrate its expertise to new, presumably younger customers, with the hope of continuing to handle their tax returns in future years, as their situations get more complex and require more expensive preparation.
H&R Block, based in Kansas City, Mo., expects to report preliminary results for the tax season on April 26.