May 20, 2009 / 8:37 PM / 10 years ago

UPDATE 2-Intuit results beat expectations, shares rise

* Q3 EPS ex-items $1.68 vs $1.60 Wall Street view

* Q3 revenue $1.43 bln vs $1.41 bln view

* Consumer tax revenue up 18 pct on year to $777 mln

* Cuts forecast for full-year consumer tax revenue

* Shares rise 3 pct in extended trade (Updates shares, adds comments from company)

By Jim Finkle

NEW YORK, May 20 (Reuters) - Financial software maker Intuit Inc (INTU.O) posted quarterly results on Wednesday that beat Wall Street projections on higher sales of TurboTax tax preparation programs, sending its shares up 3 percent.

TurboTax sales rose 18 percent to $777 million during the quarter as consumers bought its software before the mid-April U.S. tax-filing deadline, buoyed by an increase in use of its Web-based version.

Chief Executive Brad Smith said that Intuit gained 6 points of market share in the online tax preparation market and that the number of customers grew by 36 percent.

But it cut its forecast for full-year TurboTax sales, blaming a decision late last year to offer some electronic filing services at no charge for customers of the PC version of the product to bring pricing in line with that of rival H&R Block Inc (HRB.N).

Profit excluding items was $1.68 per share for its fiscal third quarter ended April 30, compared with the average analyst forecast of $1.60 per share, according to Reuters Estimates.

Intuit’s overall revenue rose 9 percent to $1.43 billion, beating analyst expectations for $1.41 billion.

Revenue from sales of the PC version of TurboTax was hurt by a decision in December to follow H&R Block in letting customers file multiple federal returns tax electronically at no extra charge.

Intuit had previously charged fees for that filing service.

Without that income the company now expects consumer tax sales to grow between 5 and 7 percent this year. It previously forecast that revenue would grow 8 to 12 percent to $1.0 billion to $1.04 billion.

Sales of QuickBooks accounting software for small businesses dropped 8 percent from a year earlier to $149 million as that product line continued to suffer from the weak economy.

“We had to discount heavily to get customers into the stores,” Smith said.

That strategy resulted in boosting QuickBook unit sales by 7 percent from a year earlier and helping Intuit boost its unit market share by 3 points to 94 percent, he said.

“Sentiment is better than it was a month ago but still significantly worse than it was a year ago,” he said.

He added that he not betting the small business market will improve this year or into 2010.

Net income rose to $485 million, or $1.47 per share, from $444 million, or $1.33, a year earlier.

Shares in the Mountain View, California company rose 3 percent to $25.99 in extended trade after closing at $25.18 on Nasdaq. (Reporting by Jim Finkle; Editing by Phil Berlowitz, Bernard Orr)

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