Earnings Preview: Intuit

Intuit (INTU) is expected to report Q3 earnings after the market close on Wednesday, May 20, with a conference call scheduled for 4:30 pm ET.

Guidance

The consensus estimate is $1.61 for EPS and $1.42B for revenue, according to First Call. On the company's last earnings call management provided lower Q3 guidance of $1.57 to $1.68 in EPS, and $1.38B to $1.46B in revenue. Guidance for FY09 was also lowered by the company relative to Street expectations to a range of $1.78 to $1.89 in EPS, and $3.13B to $3.25B in revenue.

Analyst Views

The company was facing challenges in its Digital Insight, QuickBooks and other businesses. Last month Jefferies downgraded Intuit to a Hold rating, saying the company will see a second consecutive year of declining ASPs in its consumer tax business, as well as unit share losses to its biggest competitor, H&R Block (HRB). Jefferies said that “given ongoing cyclical pressures in the company’s QuickBooks business,” there “few alternative catalysts for the shares over coming months.”

But Credit Suisse is currently comfortable with their Q3 revenue estimate of $1.40B, and EPS of $1.60. While the consumer tax season was slightly softer than expected, Credit Suisse believes that Intuit remains on track for its full year guidance of 2%-6% Y/Y revenue growth with solid performance from its growth drivers, including QuickBooks, Payroll and Financial Institutions. With another solid tax season behind Intuit, albeit at modestly lower revenue growth, Credit Suisse believes the company is set up well for solid performance going forward. The firm noted that seasonally, the stock trades best post-tax season. Credit Suisse rates Intuit Outperform with a $28 price target.