UPDATE 1-H&R Block loss narrows on reduced expenses

Thu Dec 6, 2012 6:03am EST

* 2nd-quarter loss per share $0.37 from continuing operations

* 2nd-quarter rev up 6 percent to $137 million

* 2nd-quarter expenses down 10 percent

Dec 6 (Reuters) - H&R Block Inc, the biggest U.S. tax preparer, reported a narrower-than-expected quarterly loss as its cost-reduction measures continued to pay off.

The company has been realigning its focus to its core tax preparing business after several years of losing customers to do-it-yourself tax filing services like Intuit Inc's TurboTax.

It has cut jobs, shut stores and overhauled its management this year to focus on the fast-growing digital tax preparation segment.

Net loss from continuing operations for the second quarter fell to $101 million, or 37 cents per share, from $123 million, or 41 cents per share, a year earlier.

Total revenue rose 6 percent to $137 million, boosted by a strong tax season in Australia.

Analysts on average were expecting the company to post loss of 40 cents per share on revenue of $140.5 million, according to Thomson Reuters I/B/E/S.

Expenses fell 10 percent to $302.3 million in the quarter ended October.

H&R Block, incorporated in 1955 by brothers Henry and Richard Bloch, is exploring strategic alternatives for its banking operation to avoid costly oversight by the U.S. Federal Reserve under the Dodd-Frank Act.

The second quarter is seasonally loss-making for tax preparers. They earn most of their profits in the fiscal third and fourth quarters when most people file their taxes.

Tax preparers set up their outlets in department stores during tax season, hoping to benefit from the large number of customers who flock into the stores.

The Kansas City, Missouri-based company said in September that it will no longer operate in Sears Holdings Corp's stores. It operates out of about 300 Walmart Stores and expects to increase its presence in 2013.

Shares of H&R Block, which have risen about 12 percent in the past three months, closed at $17.57 on Thursday on the New York Stock Exchange.

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