Intuit profit misses, expects weak first-quarter revenue

Tue Aug 21, 2012 7:13pm EDT

(Reuters) - Intuit Inc (INTU.O), the maker of tax-preparation software TurboTax, sees weaker first-quarter revenues as it comes off a weak tax filing season that also hurt fourth-quarter results, which missed Wall Street estimates.

"Typically the (consumer tax) category has grown five points each season, but last year in 2011 the category was flat and it didn't grow as much as we'd expected last season (in 2012)," Chief Financial officer, Neil Williams, told Reuters on the phone.

The consumer tax segment, which consists of TurboTax and other tax preparation software, contributes close to 50 percent of total revenues. But full-year revenue growth was flat at 2011 levels of 11 percent.

Intuit generates most of its profit in its fiscal second and third quarters, when U.S. consumers are more likely to buy its software in the lead-up to the tax season. Its fourth and first quarter are seasonally weak as it is the tax filing off-season.

"We still think there is a lot of opportunity in consumer tax and the midpoint of our range for consumer tax is double digits in 2013 and that growth will be fueled by consumer growth," Williams said.

The company is now also concentrating on its small business segment and has sold lower margin units such as Intuit Websites and consumer banking in a bid to increase overall margins, Chief Executive, Brad Smith, said on a post earnings analyst call.

It has now built the division, which helps companies process credit-card transactions, manage employee payrolls and build websites, into a $1.5 billion-a-year operation. It was larger by revenue than the company's consumer tax division last year.

Shares of the Mountain View, California-based company fell 3 percent to $57.30 after closing at $58.95 on Tuesday on the Nasdaq.

FIRST-QUARTER SALES WEAK

The company, which also makes accounting software for businesses, expects a loss of 6 cents to 7 cents per share in the first quarter, on revenue of $630 million to $640 million.

Analysts on average expected a loss of 8 cents per share, on revenue of $653.1 million, according to Thomson Reuters I/B/E/S.

The company also raised its quarterly dividend by 13 percent to 17 cents per share.

The company posted a profit of $4 million, or 1 cent per share, in the fourth quarter, from a loss of $57 million, or 19 cents per share, a year earlier.

For the three months ended July 30, its revenue rose 14 percent to $651 million, falling below analysts' estimates of $652.5 million.

Excluding exceptional items, it earned 3 cents per share, missing Wall Street estimates by 3 cents.

The company said a restructuring charge of $15 million related to staff alignment implemented in July and termination of certain consumer money card agreements hurt adjusted profit by 3 cents per share.

(Reporting by Siddharth Cavale & Aurindom Mukherjee in Bangalore; Editing by Supriya Kurane and M.D. Golan)