February 20, 2014 / 10:25 PM / 4 years ago

UPDATE 2-Intuit raises forecast on demand for DIY tax filing

* Second quarter rev down 12 pct to $782 mln vs analysts est $778.9 mln

* Sees third quarter EPS $3.46-$3.51 vs est $3.49

* Expects to double QuickBooks customer base over next five years

* TurboTax online sales up 11 percent in U.S. tax season through Feb. 15

* Co wants to grow customers faster than revenue-CEO

By Neha Dimri

Feb 20 (Reuters) - Intuit Inc raised its third-quarter earnings forecast due to strong demand for its online tax-preparation software, TurboTax, in the U.S. tax-filing season and said it aims to double the number of customers in its biggest unit.

Intuit’s shares rose 3 percent in extended trading after the company’s second-quarter revenue fell less than expected despite a delayed start to the tax-filing season.

Chief Executive Brad Smith said Intuit’s goal was to double its 5 million customers over the next five years in its small business group unit, under which it provides its flagship accounting software, QuickBooks.

Intuit sold its financial services unit last year to focus on expanding its tax-preparation services as well as the small business group unit, which is the biggest contributor to revenue.

“We want to grow our customers faster than revenue because we think that builds the healthiest business for next year,” Smith told Reuters.

The company expects revenue at the small business group unit to grow 10-12 percent this year.

Wedbush Securities analyst Gil Luria said the forecast was “very much achievable because of growth of QuickBooks online and growth in payroll business.”

The Mountain View, California-based company said sales of its of its flagship TurboTax application grew 7 percent to 14 million units in the season through Feb. 15, led by a 11 percent growth of TurboTax Online.

Earlier this month, Intuit cut its estimate for the second quarter ended Jan. 31 after the U.S. Internal Revenue Service delayed by 10 days to Jan. 31 the date on which Americans could begin filing their 2013 tax returns.

Intuit, which competes with shop-front tax preparer H&R Block Inc, said last week it expected about $120 million of revenue to shift to the third quarter, of which $80 million was related to the delayed tax filings.

That helped the company to raise its current quarter forecast and maintain its full-fiscal forecast.

Intuit on Thursday forecast third-quarter earnings of $3.46-$3.51 per share on revenue of $2.33-$2.40 billion.

Analysts on average were expecting earnings of $3.49 per share on revenue of $2.37 billion, according to Thomson Reuters I/B/E/S.

The company gets most of its profit in its second and third quarters when Americans are more likely to buy its software in the lead-up to the tax season. Its first and fourth quarters are seasonally weak as it is the tax filing off-season.

The company reported a net loss of $37 million, or 13 cents per share, in the second quarter, compared to a net income of $71 million, or 23 cents per share, a year earlier.

Excluding exceptional items, the company earned 2 cents per share, in line with analysts’ average estimate.

Revenue fell 12 percent to $782 million. Analysts were expecting revenue of $778.9 million.

Intuit’s shares rose to $75.89 in trading after the bell. They closed at $73.85 on Thursday on the Nasdaq.

The stock has gained 14 percent in past 6 months, trailing the 31 percent rise in the S&P 500 Application Software Index during the same period.

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