Intuit Inc. reported tax season revenue that fell just short of estimates on fewer-than-anticipated filings. The shares declined about 4% in extended trading.
(Bloomberg) — Intuit Inc. reported tax season revenue that fell just short of estimates on fewer-than-anticipated filings. The shares declined about 4% in extended trading.
The company, however, gave a better-than-expected sales and profit forecast in the current quarter and raised its annual outlook.
Fiscal third-quarter revenue increased 7% to $6.02 billion, the company said Tuesday in a statement. Analysts, on average, estimated $6.09 billion, according to data compiled by Bloomberg. The period that ended April 30 — including tax season — is the most critical for the maker of TurboTax and other finance software. Profit, excluding some items, was $8.92 a share, while analysts expected $8.45.
Intuit said the number of federal tax returns will decline about 2% by the end the fiscal year and the market share among customers doing their own taxes will fall about three-quarters of a point.
“This was driven by taxpayers who filed in order to receive pandemic-era stimulus and tax credits during the past several years but did not file taxes this season,” Intuit said in the statement.
Revenue from the consumer group, including TurboTax, gained 3% to $3.3 billion in the quarter, short of analysts’ estimates of $3.53 billion. The IRS said last week that it will test a free agency-run online tax-filing tool, following an infusion of money from the Biden administration. Wall Street analysts still say it’s a remote possibility that a government-run system would disrupt TurboTax. Intuit’s tax tool emphasized full-service assisted filing this year, in an attempt to compete with traditional accountants.
The shares declined to a low of $425.23 in extended trading after closing at $449.80 in New York. The stock has gained 16% this year.
Intuit said sales in the current quarter will increase 9% to 10%, raising its fiscal year revenue forecast to as much as $14.3 billion. Analysts, on average, estimated of $14.2 billion. Annual earnings, excluding some items, will be $14.20 to $14.25 a share. Analysts’ projected $13.81.
Read More: Free IRS TurboTax Competitor Is Closer After Biden Funding
In the fiscal third quarter, the small business segment grew 21% to $2 billion. Credit Karma generated $410 million, compared with $379.3 million projected by analysts. The performance of Credit Karma and Mailchimp remain major investor concerns, Jordan Klein, an analyst at Mizuho, wrote in a note ahead of the results.
–With assistance from Naomi Jagoda.
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