Earnings Preview: Intuit

Intuit (INTU) is expected to report Q1 earnings after market close Wednesday Nov. 19, with a conference call scheduled for 4:30 pm ET.

Guidance

The consensus estimate is for a loss (12c) for EPS and revenue of $484.15M, according to First Call.

Analyst Views

The company historically posts a small loss during the lull, the September quarter, so it's hard to expect anything else. Wall Street will focus more on forward guidance.

At the Sept. 24 analyst day, Intuit provided Q1 guidance of a loss (14c) to a loss of (11c), on revenue of $480M to $492M. Intuit also provided FY09 guidance of $1.90 on revenue growth of 9% to 12%.

Citigroup expects Q1 results in-line with its loss (11c) and $485M estimates, for Intuit's seasonally smallest quarter. However, Citigroup says it's questionable whether the company is "still comfortable" with its prior outlook "given the worsening macro picture." Intuit's business is "relatively shielded" from the economic downturn, said Citigroup, since less than 5% of revenue comes from outside the U.S. and the tax business is "relatively anti-recessionary." Citigroup also said that its QuickBooks products and payments processing division are both "tied to the health of U.S. small businesses." The firm believes there's a limit to how much strong sales of TurboTax might help offset weakness in that area, noting that recent promotions launched for QuickBooks and its online payroll product "raises concerns."

Looking forward Citigroup says their FY09 QuickBooks revenue growth forecast of 9% could be at risk should the recession deepen; INTU had already experienced weakness in F2Q08, which led to lowered segment guidance for FY08. Citigroup says, low QuickBooks unit sale can also hurt the Payroll business. The firms FY09 estimates are towards the low-end of company guidance around $3.35B and $1.84.