H & R Block Stock | Shares Selloff After Earnings Announcement

HR Block

H & R Block, Inc. (NYSE: HRB)


H & R Block , the ubiquitous 62 year old tax preparation company in the U.S.A., founded by brothers Henry and Richard, reported their fiscal 2018 first quarter earnings on Tuesday August 29, 2017 after the market closed at 4pm EDT.

The behemoth firm has roughly 12,000 retail establishments located around the world to assist in proper filing of legal documents related to all things subjected to taxes. The company pays a hefty dividend of 3.28 % annually and institutions own about 95 % of the outstanding shares-of which 12 % of them are in the short interest.

Shares closed down 3.46% or down -$1.01 at $28.22 when the market closed in the after hours session. However, in the regular trading session shares were down only

$ -0.38 closing at $29.23 which was down 1.28%.

HRB Numbers

The company reported a larger than expected loss. They lost $131 million dollars versus $124 million dollars in the same period last year. This equates to losing $.63 this quarter versus $.56 last year this time.

Many analysts were coming in around a loss of $.62 per share ( pretty good estimate, all things considered). Perhaps the analysts were so very close to the actual numbers because H & R Block typically always reports a loss in the 1st quarter due to their seasonal weighing on earnings.

Company Comments

Tom Gerke, H&R Block’s interim president and chief executive officer had this to say in the Conference Call:

We are building on our momentum from fiscal 2017 to deliver another successful tax season for both our clients and our shareholders, The management team has been hard at work to execute against our plans and we’re excited to have Jeff Jones, a strong and experienced leader, join us as our new CEO.”

Tony Bowen, H&R Block’s chief financial officer added,

“Our fiscal first quarter results were in line with expectations and reflect the seasonality of our business, Our preparation for the upcoming tax season is progressing well and we look forward to sharing more detail regarding our financial outlook during our second quarter earnings call.”

The Charts

HR Block

The above price chart shows H&R Block on the five-minute time and price levels. On the left is the intraday regular session, and on the right is the after-hours session. On the right it is easy to see in the long red down candle that forms when the  earnings announcement was released. After dropping precipitously, shares found support and rally back roughly 23% of the down move.

HR Block

The above price chart shows the daily action going back to March of 2017. Note on the right how the share price is below all the short-term moving averages, simple 50, and exponential 8 and 21.

Company Profile

H&R Block, Inc., through its subsidiaries, provides assisted income tax return preparation, digital do-it-yourself (DIY) tax solutions, and other services and products related to income tax return preparation to the general public primarily in the United States, Canada, and Australia. The company offers assisted income tax return preparation and related services through a system of retail offices operated directly by the company or by franchisees.

It also develops and markets DIY income tax preparation software; and provides DIY tax services, including preparation of federal and state income tax returns, review of tax returns by a tax professional, access to tax tips, advice and tax-related news, use of calculators for tax planning, and error checking and electronic filing.

In addition, the company develops and offers applications for mobile devices, which offer tax return preparation solutions and related services and products to clients. Further, it provides refund transfers, H&R Block Emerald Advance lines of credit, H&R Block Emerald Prepaid MasterCard, Peace of Mind Extended Service Plan, Tax Identity Shield, refund advance loans, and an Instant Cash Back refund option. H&R Block, Inc. was founded in 1946 and is headquartered in Kansas City, Missouri.- YahooFinance